Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PETITION

Redbourn

Mr. Allason: I beg to ask leave to present a Petition from my constituents, which reads:
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
The Humble Petition of the residents of Red-bourn and its neighbourhood sheweth that whereas the increasing volume of fast and heavy road traffic passing along the main trunk road known as the A5 through our narrow village High Street and only shopping centre presents a grave danger to our people, especially old persons, shoppers and children, from risk of accident, and accelerates the deterioration of the environment.
Wherefore your Petitioners pray that your Honourable House will require the Department of Environment and other authorities responsible for these matters to give priority to the early building of roads by-passing Redbourn, and pending their construction to take other immediate safety measures for the protection of our people.

And your Petitioners, as in duty bound, will ever pray.
This Petition has been signed by no fewer than 1,900 of my constituents, which is substantially the population of the village of Redbourn.

To lie upon the Table.

Oral Answers to Questions — WALES

Comprehensive Schools (Standards)

Mr. John Stradling Thomas: asked the Secretary of State for Wales what proposals he has with regard to the provision of special assistance to local education authorities with 11 to 16 comprehensive schools in order to bring such schools up to the standards required by pupils, teachers and parents.

The Secretary of State for Wales (Mr. Peter Thomas): None. It is expected that any proposals by local education authorities to make up deficiencies at such schools or to convert them to other forms of secondary organisation, including 11–18 schools, should be carried out through the annual minor and major capital building programmes.

Mr. John Stradling Thomas: I thank the Secretary of State for his reply. Is he fully aware of the acute anxiety felt by teachers, parents and some pupils about


the situation of these schools without sixth forms? Is he aware of the great difficulty which can arise in that if such a school gets a bad name, it could bring into disrepute the whole concept of comprehensive education in the area? May I urge my right hon. Friend to do all that he can to assist local authorities faced with this difficulty?

Mr. Peter Thomas: If my hon. Friend has any particular school in mind I should be grateful if he would let me know. Clearly, 11 to 16 comprehensive schools are established only in areas where the school population is not large enough to enable individual schools to support fully viable sixth form units.

Blaenau Ffestiniog (Visit)

Mr. William Edwards: asked the Secretary of State for Wales if he will make an official visit to Blaenau Ffestiniog.

Mr. Peter Thomas: I have no immediate plans to visit Blaenau Ffestiniog. But I will bear the hon. Member's suggestion in mind when an opportunity occurs of doing so.

Mr. Edwards: Is the Secretary of State's reluctance to come to Blaenau Ffestiniog due to the fact that the Conservative candidate at the last election promised that his Government would give special assistance to that community? Is he unwilling to come to Blaenau Ffestiniog because he does not have such special assistance to give?

Mr. Peter Thomas: No, I am certainly never reluctant to come to Blaenau Ffestiniog. I am always very pleased to visit the place. I know it very well indeed. Officials of the Welsh Office and the Department of Trade and Industry went to Blaenau Ffestiniog in February, at my request, had a meeting with the full council, and gave me a report which I found very useful. The hon. Gentleman will remember that at the last Welsh Grand Committee meeting I referred specifically to Blaenau Ffestiniog. He will be happy to know that work is to commence today on the construction of the 10,000 sq. ft. factory which I mentioned on that occasion. I hope that the factory will be ready for occupation by the end of the year.

European Economic Community

Mr. Roy Hughes: asked the Secretary of State for Wales what representations he has received from the trade union movement in Wales in favour of British entry into the Common Market.

Mr. Peter Thomas: The trade union movement in Wales has made no representations to me on this matter.

Mr. Hughes: Will the right hon. Gentleman bear in mind that if Britain were to enter the Common Market it is the families of ordinary trade unionists who would have to bear the brunt of increased costs and that in terms of industrial development Wales will be more or less a write-off? Would he therefore speak up for Welsh interests in this matter?

Mr. Peter Thomas: I disagree with the hon. Gentleman. I am sure that the trade union movement in Wales is reserving its position, as are large sections of the community in Britain, until the terms are known.

Sir A. Meyer: Is my right hon. Friend aware that trade union organisations within the Common Market countries which had certain misgivings about the Common Market when it was first formed are now unanimous, including even the Communist unions, in their support of the Common Market?

Mr. Peter Thomas: I certainly agree that within the Community there is great enthusiasm among not only trade unionists but all sections of the population for the idea of European unity.

Mr. McBride: Is the right hon. Gentleman aware that the trade union movement will always be in opposition to entry of the E.E.C., considering that the right hon. Gentleman was a party to Article 118 in railroading the Industrial Relations Bill through the House? Has he seen the trades councils' decided "No"? Would he therefore agree that united trade union opinion in Wales is against this sell-out of Britain?

Mr. Peter Thomas: No, I cannot agree. As I said, I have received no representation from the trade union movement in Wales on this matter.

Mr. Elystan Morgan: asked the Secretary of State for Wales if he will call a national conference of public and official bodies in Wales which are representative of a wide range of interests in order to discuss the question of the consequences to Wales of the United Kingdom's entry into the European Economic Community.

Mr. Peter Thomas: No, Sir.

Mr. Morgan: Is it not a fact that, whatever the negotiated terms will be, entry into the Common Market would create in Wales problems more acute than those in most other parts of the United Kingdom? I am thinking particularly of the inevitable eastward drift of human and material resources and of assistance to farmers on marginal land. Is it that the Secretary of State does not appreciate these problems or that he is too complacent to apply his mind to them?

Mr. Peter Thomas: The hon. Gentleman was a member of the previous Administration, and he will recollect that a great deal of consideration was given to whether a detailed analysis of the effects of entry on any particular part of Britain could prove practicable. It was found that it could not. It is important that after the terms are known there should be good public debate and discussion, and undoubtedly that will take place. But I do not believe that a conference of the kind suggested by the hon. Gentleman would serve the bodies concerned better than the existing arrangements, whereby the bodies can tell Welsh Ministers and Members directly what their views are.

Mr. Gwynoro Jones: asked the Secretary of State for Wales whether he will publish a paper on his Department's assessment of the impact on the Welsh economy if Great Britain should join the European Economic Community, following Welsh Office officials' discussions with European Economic Community representatives.

Mr. Peter Thomas: No, Sir. A detailed analysis for particular parts of the United Kingdom is not possible, but the Government believe that Wales will share fully with the rest of the United Kingdom in the benefits arising from membership of the Community.

Mr. Jones: Is there not a grave inconsistency in what the Secretary of State

says? He says, on the one hand, that it is not possible to estimate the effect on regions such as Wales; yet, on the other hand, he predicts confidence? At this late stage, when right hon. Gentlemen opposite are gleefully accepting that they are already in the Common Market, will he ensure that some assessment is made of the impact on the Welsh economy, especially regional development in areas such as West Wales? Will he speak for Wales and its people and stop acting as Chairman of the Conservative Party?

Mr. Peter Thomas: It was agreed by the previous Administration that all parts of the United Kingdom should share in the benefit that the United Kingdom should have from entry into the European Economic Community.

Mr. McBride: asked the Secretary of State for Wales what estimate he has made of the volume of industry which would be attracted to Wales, assuming that Great Britain enters the Common Market.

Mr. Peter Thomas: It is not feasible to make such estimates. Wales should, however, share fully in the increased industrial opportunities presented by membership of the European Economic Community.

Mr. McBride: Is the right hon. Gentleman aware—and he has Ministerial corroboration a few yards away from him—that under Article 67 of the Treaty of Rome we should have no control over capital outflow, and that therefore investment in industry would be concentrated in the Low Countries, and Wales would suffer? Is he aware that Wales would stagnate because it would be on the periphery of the enlarged E.E.C.? Will he oppose entry into the E.E.C. and thus protect the interests of the Welsh people, from whom he springs?

Mr. Peter Thomas: The hon. Gentleman should await the terms which may be agreed in June before he reaches the conclusions that he so emphatically states.

Llantrisant New Town (Factories)

Mr. John: asked the Secretary of State for Wales how many factory units he estimates will be established in the proposed Llantrisant New Town.

Mr. Peter Thomas: It is not possible to say, but I expect about 18,000 jobs to be provided in a new town of the size envisaged.

Mr. John: Would the right hon. Gentleman agree that there is a difference between wishful thinking and planning and that the vagueness of his proposals on industry is giving rise to grave doubt in the locality of Llantrisant about how many jobs will be created?

Mr. Peter Thomas: It is impossible to plan until the new town is set up. These are just proposals; following the proposals there will be consultations with the local authorities. I shall presumably make a designation order following those consultations, and then the usual statutory procedures will apply.

Mr. George Thomas: But the right hon. Gentleman has told us again this afternoon that he expects 18,000 new jobs to be provided at Llantrisant. On what basis does he calculate this figure and found his expectations?

Mr. Peter Thomas: I said that it was not possible to say but that I expected about 18,000 jobs to be provided in a new town of the size envisaged. The reason why I said that was that Professor Buchanan's original target of a town of 94,000 by 1981 has been reduced in my proposals to between 70,000 and 75,000. This would mean that the original estimate by Professor Buchanan of 22,000 jobs would be reduced to 18,000.

Transport

Mr. Nicholas Edwards: asked the Secretary of State for Wales whether he will establish an inquiry, either on a departmental basis or in co-operation with the Welsh Council, to make a comprehensive re-examination of the transport requirements of the Principality, including the road, air and rail services, and to report on the way in which they may best be improved.

Mr. Peter Thomas: The Welsh Council will continue to pay particular attention to the public transport situation in Wales and will report its conclusions to me. In the circumstances, I do not think a further inquiry is necessary.

Mr. Edwards: I am glad that the Welsh Council will consider the matter, but there will be some disappointment at my right hon. Friend's reply. Is he aware that, while we welcome the speeding up of the major road programme, there are many aspects of the Welsh transport scene which cause concern—nobably the lack of any air service between South Wales and London or within the Principality itself, the inadequacy of the rail system even over many existing routes and the shortcomings of the rural buses and that, if we go into Europe, as I hope we shall, an improved transport system will be even more important?

Mr. Peter Thomas: I certainly agree that there are many anxieties about transport in Wales, and the transport requirements in the Principality are continually being examined by the responsible Departments, which act in close liaison.

Mr. Ifor Davies: Is the right hon. Gentleman aware of the growing fears concerning future air services at the Fair-wood airport in my constituency, having regard to its importance to the economic and industrial development of West Wales? Is he further aware that a consortium of West Wales local authorities, together with the Swansea authority, is struggling hard to keep this airport open? Would he investigate the possibilities of giving aid in accordance with the Government's civil aviation policy?

Mr. Peter Thomas: I am aware of these anxieties and of the views which have been expressed. As the hon. Gentleman knows, a meeting was arranged between those interested from his constituency and around his constituency with my right hon. Friend who is responsible.

Nursery Schools Flintshire

Mr. Barry Jones: asked the Secretary of State for Wales how many nursery schools, English speaking and Welsh speaking, respectively, there are in Flintshire, giving the location of each.

Mr. Peter Thomas: One, at Shotton. English is the medium of instruction.

Mr. Jones: Is the Secretary of State not aware of the rocketing population in Flintshire, particularly East Flintshire?


Would he not agree that, in those circumstances, there is, on new housing estates, a real and acute need for nursery school provision? Is there any action that he might take to encourage and assist local authorities to provide more nursery schools?

Mr. Peter Thomas: Yes, I am aware of the great increase in population in Flintshire, but priority at this stage is being given to the replacement of inadequate pre-1903 primary schools. Later, I hope, we shall be able to give greater priority to the needs of nursery schools. I am, however, continuing to develop nursery education in areas of special need.

Mr. Elystan Morgan: Does the right hon. Gentleman not appreciate that there are now five times the number of mothers working in Wales that there were in 1950, and that this creates a substantial social problem, to which the provision of nursery schools is part of the answer?

Mr. Peter Thomas: Yes, a lot of children under five go to primary schools; 57 per cent. of the four-year-old age group are in primary schools.

Local Government Reform

Mr. Roderick: asked the Secretary of State for Wales if he will prolong the period for receiving submissions on the Consultative Document on the Reform of Local Government in Wales.

Mr. Peter Thomas: I have received no requests for an extension of time, and I believe there is a general feeling that the 3½ months allowed for comment has been ample. However, where there has been a change of political control I am prepared to consider any request I may receive for a reasonable extension of time.

Mr. Roderick: Does the right hon. Gentleman not consider that it would be wiser to await the outcome of the Crowther Report on the Constitution? Can he honestly expect a county like Powys, which is envisaged, to comment on the proposals when it does not know what will be in the Green Paper on the financing of local government? Last, would he not consider that it is difficult for some areas where a change of boundaries is envisaged to have all the neces-

sary consultations, in view of the fact that it takes the Secretary of State six weeks to reply to letters as it is?

Mr. Peter Thomas: No, I do not agree that we should await the Crowther Report. In that, I accept the view of the previous Administration, as indeed it was their view about the publication of the Green Paper on finance. We have made it clear that we intend to legislate in 1971–72, and for that reason it is very important that we should get the views of local authorities as soon as possible.

Mr. Alan Williams: Will the right hon. Gentleman help the consultative process by explaining how he assumes a community of interest to exist between the city of Swansea and small Tory villages 10 miles outside its boundaries but not between Swansea and Labour-voting areas which actually adjoin existing Swansea suburbs?

Mr. Peter Thomas: I shall be very interested to receive the view of the local authorities in and around Swansea. I assure the hon. Gentleman that I shall pay particular attention to their views. My sole concern is to have proper and effective local government reorganisation.

Mr. Roy Hughes: asked the Secretary of State for Wales if he now proposes to issue a White Paper setting out his proposals for the reorganisation of local government in Wales.

Mr. Peter Thomas: No, Sir.

Mr. Hughes: Does the right hon. and learned Gentleman appreciate that a White Paper would give him the opportunity to withdraw his present gerrymandering proposals and place the interests of Wales, for the first time, above those of the Conservative Party?

Mr. Peter Thomas: I shall announce my final decision on local government reorganisation in the light of representations made to me by local authorities and other bodies. I shall announce my final decision in the way which seems most appropriate at the time.

Mr. Elystan Morgan: asked the Secretary of State for Wales if following the discussions between himself and Lord


Crowther on local government reorganisation in Wales, he will now agree to postpone acting upon the proposals for reorganisation contained in his White Paper until the Crowther Commission on the Constitution makes its report.

Mr. Peter Thomas: No, Sir. This Government, like their predecessors, do not consider that the Commission should constitute a bar to action where this is urgently needed.

Mr. Morgan: What was the point of the Crowther Commission meeting in public to take evidence and of the Secretary of State publishing his White Paper as a consultative document if both are to be materially affected by covert conversations between the Secretary of State and the Chairman of the Crowther Commission?

Mr. Peter Thomas: The hon. Gentleman knows full well that, as I have told the House, I did not discuss with the Chairman of the Commission what his proposals might be. I saw the Chairman of the Commission to let him know what my proposals for local government reorganisation were. I wished it also to be confirmed that there was no objection to my going ahead with those proposals.

Free School Milk

Mr. George Thomas: asked the Secretary of State for Wales how many children aged 7 to 11 years are attending schools in Wales; and what is the amount which he expects to save by the decision to end supplies of free milk to this age group.

Mr. Alec Jones: asked the Secretary of State for Wales how many schoolchildren in Wales will cease to receive free school milk following the Government's announcement on 27th October, 1970.

Mr. Barry Jones: asked the Secretary of State for Wales how many letters he has received advocating amendment of the Education (Milk) Bill, so that local education authorities could expend moneys to provide free school milk for pupils under 11 years of age; and what replies he has sent.

Mr. Peter Thomas: There are about 160,000 children aged 7–11 years attend-

ing maintained primary schools in Wales. It is estimated that the withdrawal of free milk from this age group will save about £400,000 in a full year. No letters have been received in my Department advocating amendments to the Government's proposals.

Mr. George Thomas: Is the right hon. and learned Gentleman aware that this unforgivable blow against the younger school-children in Wales will cost him far more than the £400,000 to which he has referred? Will he consult medical and educational authorities in Wales about the likely consequences of a combination of the deprivation of free school milk and the higher school meal charges? Has he taken into account the possibility of damage to the children of Wales through this wanton and foolish act?

Mr. Peter Thomas: This matter has been considered very carefully. It is the Government's view that it is a saving in Government money which can be made without any adverse effect on the health of the pupils. The right hon. Gentleman will know that children who require school milk on medical grounds will continue to receive free milk.

Mr. Barry Jones: Is the right hon. and learned Gentleman not ashamed and humiliated to put his hand to this flinty and heartless measure? Could he not attempt to adjust this so as to enable milk to be paid for out of the rates by the local education authority?

Mr. Peter Thomas: This is a gross exaggeration. In this day and age it is not thought that one third of a pint of milk for a child for 200 days in the year, which will be supplementary to its diet at home and meals at school, is essential to ensure that our children are adequately nourished. The position is that if a child between the ages of 7 and 12 needs milk on medical grounds, it will get it free.

Mr. Fred Evans: Is the right hon. and learned Gentleman aware of Early Day Motion No. 554, standing in my name and the names of 162 hon. and right hon. Members, calling upon the Government to change their mind and allow local authorities to continue this service out of the rates? Has he read the studies by the Head of the Social Nutrition Research Unit, Dr. Lynch, of Queen Elizabeth College? Is he further aware that the


Secretary of the Association of Education Committees, Sir William Alexander, has come out in support of this idea and that many other local authorities wish to continue with this service? Will he try to touch with some compassion the heart of the flinty female who is at present the Secretary of State for Education and Science?

Mr. Peter Thomas: This is a saving of Government expenditure. The money saved will be spent in those areas where it is considered that there is a greater need.

Mr. George Thomas: Sixpence off tax!

Mr. Peter Thomas: As to the point raised by the hon. Gentleman, the Bill has yet to receive a Second Reading, and there will be ample opportunity at this and subsequent stages for discussion of all aspects of the Government's proposals.

Mr. George Thomas: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek leave to raise this matter on the Adjournment at the earliest opportunity.

St. Clears—Carmarthen Road (Dual Carriageway)

Mr. Gwynoro Jones: asked the Secretary of State for Wales if he can now announce the starting dates for the construction of the dual carriageway from St. Clears.

Mr. Peter Thomas: I assume the hon. Member is referring to the proposed dual carriageway road between St. Clears and Carmarthen. This is in the preparation pool but it is too early yet to give a starting date.

Mr. Jones: Will the Minister not accept that, especially at this time of the year and until September, the road between St. Clears and Carmarthen, and Carmarthen itself, is subjected to traffic congestion every weekend over a length of about six miles? Would he not further accept that the construction of the motorway to Pontardulais by 1976—which is greatly welcomed by everyone on both sides of the House—will mean, unless there is provision for Carmarthen and the dual carriageway to St. Clears, that traffic

will move into this area all the sooner, causing even greater queues?

Mr. Peter Thomas: I certainly accept that there are difficulties. It is not possible to forecast a starting date for schemes in the preparation pool since this depends, among other things, on the time needed to complete the statutory processes and to acquire land. Work will be carried out as soon as possible after these steps have been completed.

Infrastructure

Mr. Ellis: asked the Secretary of State for Wales what new expenditure, other than that for road building, he has incurred since taking office on improving the economic infrastructure of the five North Wales counties.

Mr. Peter Thomas: I have authorised expenditure by North Wales local authorities of £2,905,000 on water, sewerage, coast protection and derelict land schemes, and approved grant aid of £341,500.

Mr. Ellis: Is the right hon. and learned Gentleman satisfied that the beneficial results on the economy of the North Wales counties as a result of this policy are better than the results that would have accrued had the policy of the previous Administration been followed? If he is, can he say in which respects?

Mr. Peter Thomas: Many of the policies which I am now following are a continuation of the policies of the previous Administration. I warmly welcome any worth-while infrastructure improvement undertaken by Welsh local authorities. As a Government, we are considering the question of applying the provisions of the Local Employment Act more flexibly.

Sir A. Meyer: Is my right hon. and learned Friend aware that if he can get a favourable decision for building an integrated steel works at Shotton and an early decision on the Dee crossing he will fill our cups with happiness in North Wales—if not to overflowing, then at least to near the brim?

Mr. Peter Thomas: I can understand the interest of my hon. Friend in these two schemes but I do not think that either of them can be classed as infrastructure.

Mr. Michael Foot: Is the right hon. and learned Gentleman aware that if he can get any decision at all about the steel industry out of the Secretary of State for Trade and Industry, it will be a 100 per cent. improvement?

Mr. Peter Thomas: The hon. Gentleman will no doubt await with interest the debate which is to follow Questions. I know that the House will be interested to hear him.

Hospitals

Mr. Coleman: asked the Secretary of State for Wales what proposals he has received for the redevelopment of the Neath General Hospital from the Welsh Hospital Board.

The Minister of State, Welsh Office (Mr. David Gibson-Watt): I have nothing to add to the reply I gave to the hon. Member on 1st February, 1971.—[Vol. 810, c. 228.]

Mr. Coleman: Is the hon. Gentleman aware of the grave concern being expressed in Neath at the delay in implementing the plans for this hospital, which were formulated as long ago as the time of the previous Conservative Administration? Will he confirm that the delay in deciding on the question of the medical school in Swansea will not be used to hold up the redevelopment of this rather important hospital?

Mr. Gibson-Watt: I can assure the hon. Gentleman that the Welsh Hospital Board is at present considering its plans for the hospital services in the West Glamorgan area. As to the last point, I can assure him that the question of the establishment of the medical school at Swansea will not delay a decision on the development of Neath General Hospital.

Mr. Denzil Davies: asked the Secretary of State for Wales what recent consultations he has had with the Chairman of the Welsh Hospital Board regarding the future of Llanelly General Hospital.

Mr. Gibson-Watt: None. I would refer the hon. Member to the answer which I gave to him on 16th July, 1970.—[Vol. 803, c. 267, 268.]

Mr. Davies: Is the Minister of State aware that there is considerable anxiety

in my constituency that the establishment of a medical school providing 1,500 beds at Swansea might well lead to the closure of Llanelly Hospital? Would he, therefore, give an assurance that if that medical school is to be in Swansea—which we would welcome—no more than 800 beds will be provided on a single site and that the remainder of the beds will be distributed between Llanelly and the other surrounding hospitals?

Mr. Gibson-Watt: I accept the hon. Gentleman's anxieties over this question and the matter of numbers. I repeat what I have said to his hon. Friend just now, that the hospital service in the area of his constituency will not be hurt by a possible medical school which may, at some time, come to Swansea.

Severnside Study Report

Mr. Probert: asked the Secretary of State for Wales, in view of the possible effects of the Severnside Study proposals upon the existing communities in Monmouthshire and Glamorganshire, if he will initiate immediately a study group or working party to consider those effects and to consider counter proposals for the revitalising of the valley communities.

Mr. Kinnock: asked the Secretary of State for Wales what consideration he has given to the Severnside Study Report; and if he will make a statement.

Mr. Gibson-Watt: The Government welcome this report as a contribution to the planning of Severnside but they are in no sense committed to its conclusions and recommendations. Before forming a view on these, my right hon. and learned Friend will be seeking the comments of the Welsh Council, the local planning authorities and others. I am confident that in formulating their views these bodies will have in mind the implications for existing communities in South Wales.

Mr. Probert: In view of the hon. Gentleman's assurance recently that the Severnside development would not be permitted until the problems of South Wales had been solved, will he state whether this is Government policy?

Mr. Gibson-Watt: I do not retreat from anything I said in Cardiff at the Press conference which I gave. In this connection we must remember that the Severnside report was commissioned by


the Labour Party when it was in government. I am glad to say that the Government are satisfied that the recommendations of this report will not be put into commission until the economic problems of South Wales have been satisfactorily dealt with.

Mr. Kinnock: Will the hon. Gentleman accept that hon. Members on this side of the House and people in Wales generally are comforted by his assurances, but that they nevertheless find that those assurances conflict somewhat with the policy followed by the Government in other spheres, since the Severnside study appears to be encouraging the idea of growth based on so-called natural growth points? Is he aware that we find it strange that the Government should be embracing the idea that there will be planned growth in Wales before natural growth takes place on Severnside?

Mr. Gibson-Watt: If the hon. Gentleman will study the report, he will find that he is not correct in what he has said.

Mr. Adley: If my hon. Friend welcomes this public relations exercise on behalf of the Government, would he accept my word that many people in the areas concerned, certainly in the Bristol/ Bath area, find the report little more than a collection of statistics, most of which were available anyway? Is my hon. Friend aware that the almost non-existent mention of transport in the region, certainly in the Bristol/Bath area, surprises many people? Is he also aware that any report that purports to be about developing the area but does not mention the new Avon Bridge, due to open next year, is virtually meaningless?

Mr. Gibson-Watt: My hon. Friend will realise that I am answering the Question from a Welsh point of view entirely. This is not a publicity exercise on behalf of the Government. If any country is faced with an increase in population of 11 million between now and the year 2000, it is right to carry out such plans.

Mr. Loughlin: Will the hon. Gentleman bear in mind that the Welsh area of Severside ought to have a greater degree of priority than the suggested North Gloucestershire development of Severn-side, and that it would be much better for the Government to continue development south-west of the Severn rather than pur-

sue a policy, as envisaged in the report, of developing the area of Staunton, Huntley and the North side of Gloucester.

Mr. Gibson-Watt: I should not like to enter into particular arguments between one part of the country and another. The hon. Gentleman knows Gloucester and his constituency better than I do. This inquiry, which was started by the Labour Party and which has now been published by the Government, ought to be looked to by planners wherever they may be, in Wales or in that part of England, who have a job to do.

Bala

Mr. William Edwards: asked the Secretary of State for Wales what assistance is available from Government resources to Bala Urban District Council to enable it to develop the township of Bala to double its present size.

Mr. Gibson-Watt: Bala, being within the development area, benefits from assistance available under the Local Employment Acts.

Mr. Edwards: Having heard the Minister's interesting thesis that it is not his task to differentiate between areas in trying to develop them and bring in new population, may I ask whether it is part of that thesis which is preventing Government assistance to towns like Bala, which the Government have designated as growth points? Is it not cynical of the Government to tell these towns that they should develop, when they cannot afford to do so because they do not have the means to build houses and factories?

Mr. Gibson-Watt: The lion. Gentleman will be glad to know that arrangements have been made for my right hon. and learned Friend to meet representatives of the Mid-Wales Industrial Development Association shortly and to have full discussions on the problems of town expansion in Mid-Wales.

Commission on the Constitution (Welsh Panel)

Mr. John: asked the Secretary of State for Wales what plans he has to seek to meet the Welsh Panel of the Commission on the Constitution.

Mr. Peter Thomas: None, Sir.

Mr. John: Does the right hon. and learned Gentleman accept that it would be worth while, in view of his meaningless assurance as to his consultation with Lord Crowther, to meet this panel to assess what it thinks of his local government proposals and anything that the panel may recommend?

Mr. Peter Thomas: As far as I can remember the hon. Gentleman's supplementary question on the previous occasion, I am afraid that he is under a misapprehension about the meeting which I had with the Chairman of the Commission. My meeting with Lord Crowther was entirely in the context of my proposals for the reorganisation of local government in Wales, and its purpose was simply to inform him of my intentions and to ensure that there were no objections from his standpoint to my going ahead.

Mr. Alan Williams: Would the right hon. and learned Gentleman indicate whether by "going ahead" he means merely publishing or actually implementing?

Mr. Peter Thomas: Lord Crowther fully accepted that it was undesirable to defer decisions on local government reform in Wales pending the report of his Commission. As the hon. Gentleman will remember, this was equally accepted and emphasised by the previous Government.

Mr. William Edwards: Is not the Secretary of State aware that in Wales we do things democratically? How is he sure that Lord Crowther holds exactly the same view as all the other members of his Commission?

Mr. Peter Thomas: I was not seeking the views of anyone except Lord Crowther. I was asking the Chairman of the Commission whether he saw any objection. It was the Government's intention, as it was that of the previous Administration, to go ahead with local government reorganisation without waiting for the Commission's report.

National Health Service (Consultative Document)

Mr. Roderick: asked the Secretary of State for Wales whether he proposes to publish a consultative document on the

reorganisation of the National Health Service in Wales similar to the one released by the Department of Health and Social Services on 17th May.

Mr. Gibson-Watt: My right hon. and learned Friend will publish a consultative document shortly.

Mr. Roderick: Will the Minister say whether the consultative document will be on the same lines as the one just published for England? Shall we have more meaningful consultations than those to which we have been accustomed in the past?

Mr. Gibson-Watt: The principles underlying the reorganisation proposals are the same in both countries, but the hon. Gentleman must await the document for details of any differences there may be between the administrative structures proposed for England and for Wales.

Industrial Establishments (Visits)

Mr. George Thomas: asked the Secretary of State for Wales what industrial establishments in Wales he has visited officially during the past month; and whether he will make a statement.

Mr. Peter Thomas: None. Had, however, the right hon. Gentleman picked the coming month, the answer would have been three.

Mr. George Thomas: The right hon. and learned Gentleman is succumbing at last to the pressures we are putting upon him. Is he aware then when he visits Wales he will find deep depression in industrial circles? There is a complete lack of confidence in the Government's policies in view of the mounting unemployment that they are causing.

Mr. Peter Thomas: I do not think the right hon. Gentleman is quite correct in saying "mounting unemployment". He will be aware that the unemployment figures dropped last month. In the past month I have had many engagements in Wales on these very matters. I am fully aware of the situation in Wales. I had eight engagements in London and five in Wales on industrial development matters.

School Meals

Mr. Probert: asked the Secretary of State for Wales what effect the increase


in charge for school meals has had upon the number of children taking school meals in Wales.

Mr. Peter Thomas: This information is not yet available. It has been estimated that, overall, there will be a fall of about 12 per cent. in the number of children taking meals.

Mr. Probert: Is the right hon. and learned Gentleman aware that statistical evidence already shows in other areas a marked decline in the number of children taking school meals and that, in view of these statistics, there is rapidly growing concern on the part of all concerned about the possible effects upon children's health? Therefore, will he do all he can to get his Cabinet colleagues to change this niggardly policy?

Mr. Peter Thomas: I do not know that any statistical evidence at present obtainable is accurate. A survey is being undertaken the result of which will be available in June. The purpose of the survey is to ascertain how much of the fall is due to higher charges or to the normal seasonal decline at this time of year and also to show the effect of the more generous scales for the remission of charges.

Mr. Kinnock: What do the Government propose to do if it is true that the take-up of school meals has fallen since the imposition of higher charges? As the Secretary of State is responsible for part of education in Wales, will he dissociate himself from the remarks and the weird logic of the Secretary of State for Education and Science who in a television programme encouraged the teaching of young children in deceit by going through a charade in presenting dinner money on Monday mornings?

Mr. Peter Thomas: I do not agree with the hon. Gentleman that my right hon. Friend engaged in deceit in any way.

Mr. Kinnock: She encouraged the teaching of it.

Mr. Peter Thomas: My right hon. Friend's programme was greatly appreciated. After the two increases in charges which were made by the previous Administration, which together represented a 75 per cent. increase, the numbers of children taking school meals initially decreased but then rose again,

by both numbers and percentage, and at the end there was an increase in the number taking school meals.

Mental Patients (Private Boarding House Accommodation)

Mr. Ellis: asked the Secretary of State for Wales how many private boarding houses in North Wales now cater for patients discharged from the North Wales Hospital for mentally disordered people; and how many are registered with the county authorities.

Mr. Gibson-Watt: Eighteen, of which five have been registered.

Mr. Ellis: Is the Minister of State aware that it has been the policy of local authorities in North Wales to secure the registration of these boarding houses and that this policy, which was beginning to bear fruit, as the figures show, is being jeopardised by the absurd ruling of the Department of Health and Social Security that the allowances paid to each patient are reduced by approximately £2 per week when the houses are registered? Will the hon. Gentleman look into the matter and consult his colleague with a view to preventing a very successful and promising development from being jeopardised?

Mr. Gibson-Watt: Yes, Sir.

Manufacturing Industry (Redundancies)

Mr. Alan Williams: asked the Secretary of State for Wales what has been the percentage increase in redundancies announced in Welsh manufacturing industry from 1st January, 1971, to the latest available date compared with the similar periods in each of the two preceding years.

Mr. Peter Thomas: Redundancies in Welsh manufacturing industry notified to my right hon. Friend the Secretary of State for Employment's Department amounted to about 8,100 in the period January to April, 1971. This was respectively 195 per cent. and 140 per cent. more than in the same periods in 1970 and 1969.

Mr. Williams: Is the Secretary of State aware that Welsh unemployment is at the moment 16 per cent. higher than it was


a year ago and that the figures he has just given, showing a trebling in the rate of increase in redundancies in manufacturing industry, are an absolutely staggering increase and a devastating indictment of a failure of his and his Government's policies and reveal the extent to which they are undermining the very industrial diversity which Wales needs and which the Labour Government built up over six years?

Mr. Peter Thomas: I am fully aware of the level of unemployment. It is a level which concerns us all, and one which is too high. One can take some comfort from the fact that the Welsh share of Great Britain's unemployment has fallen steadily over the past year and Wales has stood up better than certain other parts of the country to recent difficulties.

Mr. John Morris: Will the Secretary of State confirm that one of the industrial visits he is making next month is to the aluminium smelter at Anglesey? Was not this smelter built with the aid of investment grants? Will he explain to those he meets how that smelter would have come about without the policy of the Labour Government?

Mr. Peter Thomas: I am aware that the R.T.Z. smelter plant at Anglesey was built during the time of the late Government.

Mr. Tugendhat: Was not the R.T.Z. smelter built only as a result of the rejection of the first proposition put up by R.T.Z., which was that it should go ahead in conjunction with the Atomic Energy Authority? Was not the plan it had to adopt during the time of the late Government very much a second best; and has not the industry been twisted by the fact that we had to have three instead of two smelters?

Mr. George Thomas: Is the Secretary of State aware that when he compares the increase in unemployment in Wales with the unemployment in the rest of the United Kingdom he brings comfort to no one? What we want from him are practical proposals for increasing employment in the Principality?

Mr. Peter Thomas: The right hon. Gentleman should take comfort from the fact that when there are difficulties in

the United Kingdom as a whole Wales e has been able to withstand them better than she has done in previous years. As regards proposals for stimulating the economy, I suggest that he looks in detail s at the measures which have been e announced by the Government and, in particular, the Budget.

Oral Answers to Questions — PART-TIME STIPENDIARY MAGISTRATES

Mr. Clinton Davis: asked the Attorney-General if he will take steps to enable part-time stipendiary magistrates to be appointed to deal with long trials or committal proceedings, particularly where accused persons are being remanded in custody in areas where only lay magistrates sit at present.

The Attorney-General (Sir Peter Rawlinson): The hon. Member's proposals would require legislation but the suggestion will certainly be studied and borne in mind when a suitable opportunity for such legislation occurs.

Mr. Davis: While I thank the right hon. and learned Gentleman for that reply, can he indicate when such legislation is likely to be introduced? Is he aware of the great injustice caused to a substantial number of people who are remanded in custody in circumstances such as I have described, simply because a lay justice can sit in a court only once or twice a week?

The Attorney-General: There have also been suggestions by the Chief Metropolitan Magistrate about the greater use of a whole-time stipendiary magistrate to travel around. Delays occur mainly from lack of accommodation. I will certainly bear in mind what the hon. Gentleman has suggested.

Oral Answers to Questions — LEGAL AID SCHEME (TRIBUNALS)

Mr. Clinton Davis: asked the Attorney-General if he will now take steps to enable legal aid to be extended to further tribunals.

The Attorney-General: The extension of legal aid to further tribunals will be considered in the light of research now


taking place into the need for legal assistance in those proceedings.

Mr. Davis: Is the Attorney-General aware that tenants appearing before rent assessment tribunals are frequently prejudiced because they cannot afford legal representation, whereas landlords can afford not only that but expert advice? Does not he think that the matter requires urgent attention?

The Attorney-General: The question of legal representation before tribunals is being studied by the Nuffield Foundation, the Universities of Birmingham, Newcastle and Edinburgh and the Cobden Trust. The Committee on the Rent Acts was not in favour of legal aid being made available in proceedings before rent assessment committees, and there are indications that other bodies have been suggesting that legal assistance is not perhaps the most appropriate.

Sir Elwyn Jones: What progress is being made in the provision of facilities for expert witnesses to be called for tenants before rent tribunals? It would seem that priority should be given to that problem.

The Attorney-General: I think the right hon. and learned Gentleman is correct, that very often the need is for the expert rather than for legal assistance. I will make inquiries, as I cannot tell him exactly what progress has been made in that respect.

Oral Answers to Questions — PINNOCK FINANCE COMPANY

Mr. Arthur Lewis: asked the Attorney-General why, in view of the report on the Pinnock Finance Company crash and theprima-facieevidence submitted therein of alleged fraud and various other illegalities, the Director of Public Prosecutions has decided to take no action; and whether he will make a statement.

The Attorney-General: The report by the Board of Trade Inspectors was received by the Director of Public Prosecutions in May, 1970. After discussion with me, the Director decided in June, 1970, that, having regard to the nature of the available evidence, police inquiries would not be warranted at this stage.

Mr. Lewis: Why, in view of the evidence in that report, did the Director of Public Prosecutions issue a statement which in effect gave notice to one of the people mentioned in the report, who was then in residence in Australia and could have been extradited, so that he could flee to a country with which we had no extradition arrangements? Surely that was warning him to get away, which he has now done?

The Attorney-General: I have no knowledge of the person to whom the hon. Gentleman referred. The whereabouts of the principal concerned is unknown, and has been unknown since 1967. There have been various rumours of his whereabouts, but they have not been substantiated, and the police have no knowledge of where he is now.

Oral Answers to Questions — MURDER CASE (FILM)

Mr. Arthur Lewis: asked the Attorney-General whether he is aware that the Commissioner of Police has admitted that the Metropolitan Police co-operated with the British Broadcasting Corporation in making a film of the McKay murder case whilst the appeal and appeal proceedings were pending; and whether he will take action against the police and the British Broadcasting Corporation for interfering with the process of justice in a matter which was sub judice.

The Attorney-General: I am satisfied that the making of this film, which was broadcast after the appeal had been dismissed, did not interfere with the administration of justice, or prejudice the appeal in any way. There are no grounds for taking any action.

Mr. Lewis: Whilst I pay tribute to the police for their efforts in apprehending the criminals and having them convicted, does not the right hon. and learned Gentleman think it is wrong that before the accused were properly charged, before the trial had begun, before their appeal had begun, and before the appeal had been heard, negotiations were taking place and work had begun on the making of the film, which was finished and shown within three weeks of the result of the appeal? Should not justice not only be done but be seen to be done? As this has been the only occasion on


which this has happened, will the Attorney-General see that it is the last?

The Attorney-General: The only question with regard to the prejudice of an appeal is whether the Lords Justices would have been prejudiced. As they did not see the film, there was no question of any prejudice to the appeal.

Oral Answers to Questions — MAINTENANCE ORDERS

Mr. Dalyell: asked the Attorney-General how many letters have been received by his Department, for a convenient period during the last 12 months, from women who complain that court orders, in their favour, involving alimony, have not been implemented; and what replies he has sent.

The Attorney-General: During the six months from 1st November, 1970, to 30th April, 1971, nine such complaints were received by my noble Friend the Lord Chancellor. The content of each reply sent has related to the exact nature of the particular complaint. While my noble Friend cannot himself give legal advice to individuals, replies have included information about the relevant law and procedure, including, recently, the Attachment of Earnings Act, 1971, and about the availability of legal aid.

Mr. Dalyell: Since the recent Government circular, is there any sign that the courts have become less lethargic about the matter?

The Attorney-General: The Government are considering how improvements can be made in the procedure for enforcement. The Attachment of Earnings Act will assist, I hope. Magistrates' courts have power to obtain a husband's address, for instance, through the Department of Health and Social Security.

Oral Answers to Questions — SOLICITORS (CONVEYANCING CHARGES)

Mr. Kaufman: asked the Attorney-General whether he is now in a position to make a statement about the action he proposes to take to implement the recommendations in Report No. 164 of the National Board for Prices and Incomes, Command Paper No. 4624, with regard

to the reduction of conveyancing charges by solicitors.

The Attorney-General: I would refer the hon. Member to my answer to his supplementary question on 19th April. The necessary studies have not yet been completed.—[Vol. 815, c. 809–810.]

Mr. Kaufman: Is the Attorney-General aware that it is nearly two months since that Report was published? Should not the Government take action now to implement the recommendations of the Prices and Incomes Board so that the power of this closed shop can be broken and people who wish to buy their homes can be given greater assistance?

The Attorney-General: The hon. Gentleman has obviously not remembered the answer I gave him on 19th April. The Report was received on 1st April. The recommendations were to be studied in the light of the Monopolies Commission Report. That Report has been received, the Law Society's reflections upon it have been received, and all are under consideration.

Oral Answers to Questions — OBSCENE OR INDECENT MATERIAL (DISTRIBUTION)

Mr. Dempsey: asked the Attorney-General how many prosecutions under the Post Office Act, 1953, concerning the delivery of obscene or indecent material by post have been carried out in the last five years; and how many convictions have been obtained.

The Attorney-General: The Director of Public Prosecutions prosecuted in 81 such cases, of which 69 were successful.

Mr. Dempsey: Is the Attorney-General aware that a 10-year-old primary schoolgirl received pornographic literature through the post twice within 14 days, and that after police investigation the Director of Public Prosecutions refused to act? Is it not about time that we strengthened the law to protect innocent children against pornographic morons?

The Attorney-General: If the hon. Gentleman will give me the details of that case, I will have it investigated.

Mr. Dempsey: I sent them to the right hon. and learned Gentleman.

Oral Answers to Questions — QUESTIONS TO MINISTERS

Mr. Alan Williams: On a point of order, Mr. Speaker. May I direct attention to a point which will, I think, cause increasing irritation to back-bench members unless some action is taken fairly rapidly. I have given you, Mr. Speaker, prior notice of the point.
I have two Questions on today's Order Paper—Nos. 26 and 42. They were tabled at the same time and I wrote on them which was to be first and which was to be second. I also made the point when I spoke to the Clerk in the Table Office. They appear on the Order Paper in the reverse order so that the Question which I regarded as being of greater importance has not been reached.
May I, on behalf of back-bench Members, ask you, Mr. Speaker, to check with the Table Office to see whether a less fallible system of indicating priority in Questions can be established?

Mr. Speaker: I am grateful to the hon. Gentleman for giving me notice that he would raise this point. He is perfectly correct. His two Questions should have been printed in the opposite order. The mistake arose in the course of the final grouping of Questions on the Order Paper which, since the Resolution of the House on 7th April, has become quite a complicated process. I apologise to the hon. Gentleman. The reasons why it happened are being carefully studied, and we hope that it will not happen again.

Mr. Loughlin: On a point of order. May I ask, with great respect, why the point of order was taken prior to 3.30?

Mr. Speaker: It is for me to judge the time.

AIRCRAFT ACCIDENT (YUGOSLAVIA)

Mr. Leslie Huckfield (by Private Notice): Mr. Leslie Huckfield (by Private Notice) asked the Minister for Trade whether he would make a statement about the Yugoslav air disaster.

The Minister for Trade (Mr. Michael Noble): A Tupalev 134A aircraft, operated by Aviogenex, a Yugoslav company, on a flight from Gatwick, crashed on the approach to Rijeka airport on

the Adriatic island of Krk at 1955 hours G.M.T. yesterday. There was a major fire and 73 British passengers lost their lives, of whom 28 were men, 35 women and 10 children. Three Yugoslav passengers and three Yugoslav stewards were also killed, but four other crew members and a courier escaped with injuries.
The Yugoslav authorities have set up a Commission of Investigation, and Mr. Stewart, the British Ambassador to Yugoslavia, has accompanied the President of the Commission to the site of the accident. Because the aircraft crashed in Yugoslavia and was registered there, and had been manufactured in the Soviet Union, the investigation of the accident is a matter for the Yugoslav authorities. The Chicago Convention on International Civil Aviation 1944, Annex 13, does not give us a right to take part, but, contrary to what may appear from some of the newspapers, it does not prevent our doing so. In fact, we have offered to assist and the Yugoslav authorities have agreed that two members of our Accident Investigation Branch may attend as observers. Two Inspectors of Accidents are now on their way to Rijeka.
Her Majesty has asked that her condolences should be sent to the relatives of those who have lost their lives. A message of condolence has been received from the Yugoslav Director General of Civil Aviation, for which I would like to express my gratitude. I know the House will wish to join me in expressing our deepest sympathy with the relatives of all who have lost their lives in this disaster.

Mr. Huckfield: I am grateful to the right hon. Gentleman for that information. I am sure the whole House would wish to be associated with his expressions of sympathy. While it is far too early to conjecture about the cause of the accident, may I ask him whether he can give any further information about contact which he has had with the Yugoslav authorities and when he expects the report to be published in this country?

Mr. Noble: As the hon. Gentleman said, it is too early to speculate on the causes of the accident. We have been


in touch with the Yugoslav authorities, and, as I told the House, they have agreed that our accident investigators should take part in investigating what happened. Until a little more is known, it is difficult to say when the report will be available.

Mr. Mason: May I associate my right hon. and hon. Friends with the Minister's expression of sympathy to all those who have lost friends and relatives in this tragic accident, particularly when one realises that a highly qualified pilot, a modern aircraft and a modern airport were involved? I hope that he will be prepared to offer the full services of his highly experienced accident and safety branch to the Yugoslavs if they require them for the accident inquiry as distinct from the observers.
May I add a word of thanks to Yugo-tours, which acted so promptly and sympathetically in making a flight immediately available for the relatives of those involved in the accident? It is only small consolation, but it means so much to them.

Mr. Noble: I agree with what the right hon. Gentleman said about Yugo-tours' very prompt action. It is a small consolation, but it was a right and proper thing to have done. I can assure the right hon. Gentleman that if the Yugoslav Government ask for help from any of our inspectors in connection with this tragic accident it will be made available.

PRIME MINISTER AND PRESIDENT POMPIDOU (TALKS)

The Prime Minister (Mr. Edward Heath): With your permission, Mr. Speaker, and that of the House, I should like to make a statement about the visit which I made to Paris last week.
I should like first to tell the House of the warmth of the welcome which I received from the President of the French Republic and from the Prime Minister and his colleagues. I was impressed by their unmistakable desire for a renewal of friendship and co-operation between Britain and France, as an essential element in the growing unity of Europe.
My talks with President Pompidou extended altogether over a period of

something like eleven hours. Except for a short time at the end of the talks when we were joined by the Prime Minister of France, we were accompanied during this time only by interpreters. This enabled us to deal with the wide range of subjects covered in the communiqué issued at the end of the talks, which I will with permission circulate in the OFFICIAL REPORT.
Our main area of discussion was the whole field of European policy. It was heartening to discover how close are the views of the French and British Governments on the development of Europe and its rôle in the world.
Our talks showed that both Governments wish to bring about the development of a united Europe through an enlarged European Community. We do not intend this as a defensive alliance against external threat. We see it as certainly the best means and probably the only means, in the world of today, of guaranteeing peace within Europe, providing prosperity for her peoples, and restoring to Europe that political, economic and cultural influence in the world that her traditions and her potential justify.
We also found an identity of view on the rôle which a united Europe can play in relation to the problems which face us in other parts of the world, and particularly in relation to the developing countries, where there is so much that an enlarged community which included Britain and France could contribute.
We discussed the development of the European Community and the working of its institutions. We agreed in particular that the identity of national states should be maintained in the framework of the developing Community. This means, of course, that, though the European Commission has made and will continue to make a valuable contribution, the Council of Ministers should continue to be the forum in which important decisions are taken, and that the processes of harmonisation should not override essential national interests. We were in agreement that the maintenance and strengthening of the fabric of co-operation in such a Community requires that decisions should in practice be taken by unanimous agreement when vital national interests of any one or more members are at stake.
This is indeed entirely in accordance with the views which I have long held.


It provides a clear assurance, just as the history of the Community provides clear evidence, that joining the Community does not entail a loss of national identity or an erosion of essential national sovereignty.
As to the means by which greater unity and co-operation could be achieved, our primary concern was with the development of common economic policies, in the context of the British application for entry into the European Communities. But we both saw this as the basis for closer political collaboration, if the negotiations for enlargement of the Communities could be brought to a successful conclusion. We had only a brief discussion of defence questions, recognising that these were matters for the future, after enlargement.
We reviewed the progress made in the Community towards economic and monetary union, following the meeting of the six Heads of Government in The Hague in December 1969. I told President Pompidou that Britain looked forward wholeheartedly to joining in the economic and monetary development of the Community, if negotiations for British accession could be satisfactorily concluded. We both arrived at a clearer understanding of each other's anxieties and objectives in this field; and I was able to dispel any reservations which the French Government might have felt about the British Government's willingness, which my right hon. Friends the Chancellor of the Exchequer and the Chancellor of the Duchy of Lancaster have often expressed, to accept the consequences of this development for its own policies.
We agreed upon the need to negotiate suitable arrangements for those members of E.F.T.A. who are not applying for membership of the enlarged Community, and thus to avoid the re-erection of trade barriers between them and the Community.
We discussed the problems which would arise as a result of enlargement of the Communities, when the time came to renew the Yaoundé Convention. The House will have noted that our agreement on the need to safeguard the existing rights of present associations under the Convention was matched by our agreement on the need to safeguard the

interests of future associates under a new Convention and particularly of those who would depend largely on exports to the enlarged Community of sugar or other primary products.
Finally, the President and I reviewed the progress of the enlargement negotiations. We did not attempt to reach definite conclusions on issues which fall to be considered within the negotiating conference in Brussels and Luxembourg. But the President emphasised the importance he attached to the system of Community preference and his welcome for Britain's acceptance of this principle immediately upon entry into the Community which had been agreed upon at the last Brussels meeting. I went over the main issues involved in a settlement of Britain's contribution to the Community budget in the years leading up to the full implementation of the Community's system of financing its expenditure. And I emphasised to President Pompidou the importance of reaching satisfactory arrangements for New Zealand. I also explained the difficulties presented for us by the existing fisheries regulation. On all these points, though we did not seek to arrive at final conclusions, President Pompidou's attitude was positive and constructive.
The results of our exchanges on these matters are best demonstrated in our joint conclusion that it is desirable and possible to reach early agreement in the negotiations between Britain and the Community. The President and I both felt able to say after our talks that we were confident that the main issues could be settled before the end of June.
There are still important questions to resolve, and there is still much hard work to be done before Her Majesty's Government will be in a position to come to Parliament with an account of the arrangements on which our entry into the European Communities can be negotiated. But this I can say today as a result of my talks with the President of the French Republic. I am confident that the divisions and suspicions which have so hampered relations between Britain and France in recent years have now been removed. We have established that the views of the two Governments are very close over the whole range of European policies. The French President has shown his clear desire to proceed


with the building of a united Europe on the basis of an enlarged Community, with Britain as a member. We can therefore approach both the final phase of our negotiations for entry into the Communities and, if they go well, the development of Europe thereafter, in a spirit of confidence and partnership. I believe that this opens the prospect of a degree of unity, and thus of peace and prosperity, in Western Europe which our continent has never seen before, and which would be of profound significance for Britain, for Europe and for the whole world.

Mr. Harold Wilson: While thanking the right hon. Gentleman for his statement, which was inevitably, and, rightly, somewhat lengthy, could I ask him if he would be good enough to confirm that no defence questions were raised in these talks and that there was no issue at any time in the private discussions of any future Anglo-French joint nuclear arrangements or of any future defence proposals other than those which fit foursquare into the Western alliance?
Secondly, in view of the reports, which appear to be authoritative, that limits in the discussions were set to the terms both in regard to the period of years and quantities, and that a settlement of the New Zealand question could be negotiated at Brussels, would the right hon. Gentleman say, in the light of what he has just told the House, whether President Pompidou as a result of those discussions has now withdrawn the term he used three times in a B.B.C. broadcast when he said that there must be a rupture of our own food import arrangements from New Zealand?
Thirdly, with regard to the budgetary contribution which the right hon. Gentleman has just mentioned, having regard to the inevitably disproportionate burden on Britain which would result from food levies—as I think the whole House has recognised from the outset—would the right hon. Gentleman now say whether he feels, following these talks, that the likely budgetary contribution to be negotiated will be one which will not place an undue burden on this country and, in particular, force this country into a continuing period of devaluation to maintain our balance of payments over the first difficult years?
Finally, would the right hon. Gentleman confirm the impression which I think the House got from the answers given us by the Leader of the House two weeks ago about parliamentary debate and stated, I think, quite specifically by the Chancellor of the Duchy of Lancaster a week ago, that when the terms are known there will be published to the House a White Paper which the House will be able to debate, and have adequate time to debate, without being asked at that time to take a yes or no decision on the terms, and that subsequently, when the country equally has had time to absorb and consider these vitally important issues, as we all recognise them to be, then, in the autumn, we will be asked to take the decision?

The Prime Minister: I have told the House that the amount of time which we devoted to the discussion of defence was very small indeed. We both accepted that the position of Britain, within N.A.T.O., and that of France, which is a member of the alliance but has withdrawn from N.A.T.O., is different. If when the Community is enlarged Europe is, in accordance with its other policies, to develop a defence policy, these matters will have to be discussed at that time, but there could have been no discussion last week at our meeting. As far as nuclear questions are concerned, both France and Britain are nuclear Powers, and there was no discussion of any arrangement. I was not asked for any offer; I made no offer; and the matter was left exactly where it stands today.
On the question of New Zealand, this is a matter which has to be settled in Brussels. The President was, quite rightly, adamant that the negotiations must be continued with the Six. In exactly the same way as in my talks with Chancellor Brandt, there has been no attempt to reach a settlement of individual problems, and the same was true in Paris.
As for our future relationship with New Zealand on trade, as with other countries, there may be changes in trading patterns, but so far as the continuation of trade is concerned, it will continue, and the form will be negotiated in Brussels.
We shall, of course, wish to publish a White Paper as soon as we can set out the conclusions on the main problems, which both the President and I believed


could be settled in June. We are considering the form in which the House will wish to debate this and the amount of time which will be required. My right hon. Friend the Leader of the House will be having discussions through the usual channels with the right hon. Gentleman.

Mr. Harold Wilson: The right hon. Gentleman inadvertently did not answer my question about budgetary contributions. Before he does so, I thank him for his other answers, but do I understand that there is now no question of an Anglo-French nuclear deal of the kind which the right hon. Gentleman used to advocate from this bench? That is how I take his answer, and I hope that he will confirm that is the case. On New Zealand, I welcome what the right hon. Gentleman has said as representing the viewpoint put by Her Majesty's Government, but did he make clear for his part that we cannot accept any proposals involving a rupture of Anglo-New Zealand trade?

The Prime Minister: I discussed with the President the new proposals on Community financing put forward at the last Brussels meeting. I said that I thought these would help to remove any suggestion that we were not accepting the full system of Community financing which had, after all, been accepted by both administrations. I said that the arrangements for it should not be such as would appear at the end of the period to be too great a burden for us to assume so that there might be a desire to try to change the whole system. It was agreed that the actual arrangements, to be satisfactory, must not place an unbearable burden on the balance of payments or across the exchanges, and that was accepted.
On New Zealand, I did not enter into a discussion about the actual words used on television. I discussed the nature of the arrangements which can be made to produce a satisfactory arrangement for New Zealand, but this will be dealt with in Brussels—[HON. MEMBERS: "Why not now?"]—because they have to be settled with all the members of the Community. As it has been known that the French negotiators have hitherto taken a certain negotiating position on New Zealand, what satisfied me was that the President's response was positive in respect of obtain-

ing a satisfactory arrangement for New Zealand—[HON. MEMBERS: "What?"]—I am not going to answer questions about details which will be settled in Brussels.
As I have already told the right hon. Gentleman, no agreement of any kind was reached between us on any aspect of defence. What was agreed was that if, in the context of the enlarged Community, Europe wishes to move towards its own defence policy, that is a matter to be settled by the European members at the time that they consider it.

Mr. Boyd-Carpenter: Will my right hon. Friend say whether in the course of these discussions the President indicated an understanding of the moral obligations of this country towards New Zealand, and of the effect on New Zealand of British entry without proper special provision for her?

The Prime Minister: Yes Sir, the President showed a full understanding of the position of New Zealand, its relationship to this country and the possibilities of dealing with these problems in the negotiations in Brussels to produce a satisfactory answer.

Mr. Shore: Has the Prime Minister simply accepted the French view of the future of Europe and, in particular, the French President's conception of a European Republic which was spelt out on British television three days before the talks began? Will he tell us whether he has also accepted the French ideas as to what are the correct terms of entry? If he has not, will he indicate any important area of negotiation where the French position has become closer to ours rather than the reverse?

The Prime Minister: In reply to the first part of the question, we reached agreement about the sort of Europe we want to see. This has not been exclusively a French view over the past 20 years, but a view which has been put forward by members of consecutive administrations, by many right hon. and hon. Gentlemen in this House and broadly held in this country. It is a Europe which, by its unity, will be of a size and nature and in an equal position with the United States, Japan or the Soviet Union, to enter into international trading arrangements and international


financial arrangements and to use its influence in the world. On this the French and British Governments find themselves in agreement.
On the question of institutions, those who have followed European policy closely will know that I for one have always believed that countries in the Community would not be able to overrule another member's vital interests. It is not a question of creating the United States of America from a country which has been newly settled. It is a question of a community of six ancient European States, well-established in themselves. Therefore, the way in which we have to develop in Europe is by harmonising policies while at the same time acknowledging the vital interests of individual countries.
The right hon. Gentleman asked me for details about the negotiations. These will be carried on in Luxembourg on 7th June and on 21st and 22nd June. Their objective now is based on the fact that the French President wants to see Britain in the European Economic Community. That is the fundamental change, surely, over the last 15 years, and it is basic to the whole negotiating position. Therefore, we shall be able, I believe, in the coming month of June to reach agreements between ourselves and the Five as to what those arrangements should be.

Mr. Dodds-Parker: I congratulate the Prime Minister on the success of the discussions, which I hope will lead to a successful conclusion of the negotiations in Brussels next month. I urge him to emphasise that the European Economic Community is not just an end in itself but is there to support in broad terms the political and defence purposes of an ever more closely united Europe.

The Prime Minister: The European Economic Community is there to ensure the prosperity of its peoples, which it has been successful in doing since its foundation, to lead to a closer unity in international finance, in monetary fields and in the co-ordination of economic policies, and then to be able to exert political influence and, if it so desires, to consider, as the European members of N.A.T.O., with the exception of France, are doing, how Europe can best contribute to its

own defence. There is the well-known difference of view in this House on whether or not Britain should become a member of the Community, but I hope that everyone here will agree that it is good for this country and good for Europe that the cloud of mutual suspicion between Britain and France which has hung over us for the last 20 years is being dispelled and we can now build a better relationship.

Mr. Thorpe: I welcome the outcome of these talks, which appear to have removed the possibility of a European veto. I recognise that there are still matters to be negotiated in Brussels, but, leaving aside the genuine opposition to Europe, which I respect, and the opposition for political tactical reasons, which I do not respect, does the Prime Minister agree that the main task now is to convince the people of this country of the undoubted economic and political advantages of uniting Europe for the first time in its history?

The Prime Minister: I thank the right hon. Gentleman for his welcome. I believe that the people of this country who have been worried about the possibility of the French Government maintaining their veto will now see that this is no longer the case and that they can consider the arrangements which it is possible to make for British entry into the Community. As the President of France said in his speech to the Press conference on Friday evening, for so long there have been those who believed that Britain's only purpose was to try to get into the Community in order to wreck it, for so long there have been those who have believed that France's only purpose was to veto Britain's joining the Community to which she had a right to belong, and before that gathering there were two men with heavy responsibilities who have now acknowledged openly that neither of those things was true.

Mr. Turton: Did my right hon. Friend explain to M. Pompidou that at present 59 per cent. of the British people are opposed to entry of the Common Market and only 23 per cent. are in favour? Did he inform the French President of the steps he proposes to take to ascertain whether the British people support any terms which are negotiated?

The Prime Minister: I have always made it plain that it is Parliament's responsibility to decide——

Hon. Members: No.

The Prime Minister: —this issue, as it is to decide every other issue of international relations [Interruption.] If hon. Members do not wish to accept their responsibilities, that is a matter for them. I have always taken the view, as a Member of Parliament, that it is my responsibility fully to report on these matters to my constituents and to consult them, but I have always taken the view of Burke, who represented the constituency of the right hon. Member for Bristol, South-East (Mr. Benn), that one owes them one's judgment as well as one's energy.

Mr. Maclennan: Does the right hon. Gentleman accept, whatever is to be the outcome of the negotiations to join the E.E.C., that the apparent accord and reasonableness of approach of the French Government on this occasion will be widely welcomed on all sides? Does he expect that all the difficult outstanding issues will have been fully thrashed out in Brussels and Luxembourg, so that the House will be in possession of the facts on which to make up its mind before the Summer Recess?

The Prime Minister: We both believe that it is desirable and possible, in the work between now and the next meeting in Luxembourg on 7th June and then the meeting in Luxembourg on 21st and 22nd June, to prepare the ground sufficiently for the Ministers to take the decisions on the major items outstanding by that time. It would then be the wish of the Government to present a White Paper to Parliament setting out the whole position.

Sir H. Legge-Bourke: Would my right hon. Friend accept that it was obvious that this meeting had to take place and that, having taken place, its success has been considerable? With regard to the arrangements through the usual channels for debating the White Paper, will he recognise clearly that it is not just a question for the House of Commons: that this really is a matter in which all of us in this House must be given adequate time to propound to our constituents what is contained in the White Paper?

Therefore, may I express the hope that when the White Paper is published, we shall have a "take-note" debate on that and then an opportunity to discuss it with our constituents?

The Prime Minister: I have said that the debate is a matter which we are considering. We would want to give the House the fullest possible White Paper at the earliest opportunity and then to have discussions about how the debate should take place, when it will take place, its length and its form. On my hon. Friend's first remarks, I am not one of those people who believe in the inevitability of casuality. There was nothing inevitable about this meeting. It was the result of a great deal of long and hard work and very careful preparation. I believe that that is the key to its success. I thank my hon. Friend for his congratulations.

Mr. Jay: Does the Prime Minister deny that his party election manifesto of last summer said:
Our sole commitment is to negotiate—no more and no less"?
If that is so, would it not be indefensible to try to force through this drastic constitutional change without a further appeal to the electorate?

The Prime Minister: I am afraid that I cannot accept that conclusion. Her Majesty's Government are not trying to force through a decision. What we are doing is preparing to give to Parliament the fullest information, which Parliament can debate—and Parliament will take the decision.

Mr. Longden: Would my right hon. Friend be good enough to confirm and underline two points arising from his statement? Is it the case that the French President accepts the view that major decisions affecting the Community must be taken by the Council of Ministers and not by the Commission, whose members, however able, are not responsible to an electorate? Second, would he confirm that decisions upon questions which are considered of vital importance to members must be taken unanimously?

The Prime Minister: Yes, Sir. The view of the French President—it is one with which Her Majesty's Government


agree—is that it is the Council of Ministers in Brussels who rightly take the decision. There are certain administrative arrangements which are handled by the Commission and which are clearly defined in the Treaty of Rome, and they cannot go beyond their powers. But our view is that it is the Council of Ministers, representing member countries, who must take the decisions.
On the second part of that question, where a country considers that an item is of major national interest to it, a decision should be taken unanimously—in other words, the member countries should not attempt to over-rule a single country in something which it considers to be of vital national interest.

Mr. Healey: Could I return to the question which many hon. Members have put to the Prime Minister and to which we really have not yet had a reply? Would he accept that on both sides of the House—among those who favour entry of the Community and those who oppose it—there is a deep and strong feeling that sufficient time should be given between the publication of the terms and the House being required to take a decision—not only for hon. Members to be able to read the White Paper, but also to consult their constituents and those others for whom they speak, and that if the Government were to attempt to bounce a decision through the House before the Recess the consequences for the purpose which they hope to serve could well be disastrous?

The Prime Minister: I have said that we fully accept the need to discuss through the usual channels with Her Majesty's Opposition the way in which this matter should be handled on the Floor of the House. I have undertaken—[Interruption.] There is no need for hon. Members to become so excited about this matter. Both parties recognise that there is a difference of view in each party, and that therefore there must be proper time in which all hon. Gentlemen can consider the White Paper. We have also to discuss the length of time for the debate, when it can best take place and the form and structure of the debate, and that we will do.

Mr. Marten: Could my right hon. Friend clear up one small point? He said that the Council of Ministers should continue to be the forum, when, at the banquet at the Guildhall in July, 1969, he said that Britain would be the first to press for democratic and parliamentary control of the Community. Chancellor Brandt when he was in London said that there should be a European Government in the end. Surely, if Europe is to speak with one voice, as we are told, can it not speak with one voice on this somewhat important matter before we start?

The Prime Minister: My hon. Friend began by saying that that was a small point and ended by saying that it was a very important matter. I agree with his last remark rather than his first—it is a very important matter. When I urged that there should be democratic control, I had in mind that Ministers are the representatives of their Governments and they are the ones who take the decisions. They are responsible to their own democracies. But I have also never hidden my view that, were Britain to be a member of the Community, it would be Members of this House who would contribute most towards the development of satisfactory parliamentary institutions in Europe.

Mr. Harold Lever: Could not the Prime Minister clear up the anxieties which are manifest on both sides of the House, in both sections of opinion on this question, about the opportunity which the House will have to decide the matter after a suitable interval? It is clear that there is great feeling in the House that this time should extend until after the Summer Recess. Would the right hon. Gentleman not give the assurance now which it is clear the House wants on this point?
Second, would he clarify somewhat the oblique reference to sterling which he made in his statement? What are our intentions on sterling? Could he also clarify whether any question of the parities and fixed parities was decided upon or discussed with the President? Or is that a matter to be left until after we get into the Community?
Finally, may I express—I am sure on behalf of all hon. Members—a deep personal gratitude to the Prime Minister


for the way in which, at some personal sacrifice, he gave in person to the French people and Government a warning of the dire consequences which will follow from excessive insistence on the need to preserve linguistic balance—[Laughter.]—by extending universally the use of the French language on all these Community matters?

The Prime Minister: On the subject of sterling, there was no discussion of parities or items of that kind. It was accepted that this matter only arises in the context of co-ordination of currencies inside an enlarged Community, if we become a member, and is obviously concerned with what progress is made on the co-ordination of policies.
As for the French language, our position has not changed over the past 10 years. When required to do so, the British delegation has always been able to carry on business in European congresses in the French language. That will remain our position, and English becomes an official language, like those of the other member countries, and is added to the list. I make no claim to mastery of the French language. What I tried to contribute was not meant to be reproduced in this country.
As for the treatment of this matter, I ask the right hon. Gentleman to allow it to be discussed in the usual way. I cannot give any undertaking at this time as to the exact date on which the White Paper will be published, the exact amount of time for the debate, the exact timing or the form of it. Nor can I give any undertaking about whether the House will be asked to reach a decision at that time——

Mrs. Castle: Why?

The Prime Minister: Because it is a matter that we ourselves wish to consider carefully. We also wish to discuss it with the Leader of the Opposition and his colleagues. It is a matter, therefore, to which we ourselves wish to give the utmost attention.

Mr. Harold Wilson: I must press the right hon. Gentleman on this. Is he aware that there has been a widespread feeling—it did not come from this side of the House—that there would be a "take note" debate before the Summer Recess, assuming that the right hon. Gen-

tleman could get out the White Paper by the end of June or early July, that not only hon. Members but the country would have time to make up their minds on the issues and, above all, the terms, which we have not before us now and cannot know until the White Paper is published? Is the right hon. Gentleman aware that it was the clear impression of most hon. Members from exchanges with two Ministers, the Leader of the House and the Chancellor of the Duchy of Lancaster, that that would be the position when it was being discussed in the House, and that it was not until we saw a rather orchestrated statement in the Press this weekend that there seemed to be any doubt? Will the right hon. Gentleman recognise that opinion in both major parties is divided, that it is sharply divided in the country, that the country has a right to consider these issues not in the middle of its summer holidays but when these matters can be debated, and, what is more, that every hon. Member has the right to know where his constituency party stands? Does not that mean the autumn?

The Prime Minister: I am not prepared to give an undertaking at this stage—[HON. MEMBERS: "Shame."] I am prepared to discuss in the usual way with the Leader of the Opposition what is the best way of handling this matter and, with my right hon. Friend the Leader of the House and the Cabinet, to take into account the different points of view in this House. I hope that the Leader of the Opposition will take the opportunity of considering the position quietly when we are able to provide a White Paper, so that he can then come to a conclusion as to the best way of handling the matter. It is not reasonable to ask me to give a decision at this stage of the proceedings about what is to happen before the Summer Recess.—[Interruption.] It is unworthy of the former Leader of the House to suggest that I intend to "bounce" this House. In all the 20 years in which I have been dealing with European policy, for nearly 15 of them as a Minister, I have always been at immense pains to give the fullest information to the House and to take the opportunity of discussing it. That is where the matter had better be left.

Mr. Harold Wilson: It is right that this vastly important matter should be decided


in a calm atmosphere. It is right that there should be discussions between the two sides. Is the right hon. Gentleman aware that the reason for our anxiety, which was not allayed by the terms or the tone of his last answer—[Interruption.] I am trying to give the right hon. Gentleman time to get back to a calm atmosphere. Is he aware that the reason for this anxiety today is that the House had the impression from his colleagues and from what was being said quite authoritatively in wide sections of the Press—and it does not get there by accident—that there would be adequate time for this matter to be debated? Will the right hon. Gentleman agree to leave it there now? Will he agree that there should be immediate discussions this week between the two Front Benches so that we can get fully the views of backbench hon. Members on both sides and those of the Liberal Party, and then see what will be of the greatest convenience in this matter? It would be wrong to wait until the White Paper comes out, perhaps in the middle of July, and then "bounce" it through when most of the country cannot make its views articulate.

The Prime Minister: The right hon. Gentleman is not justified in reaching conclusions along the lines that the White Paper will not be published until the middle of July and that there will be an attempt to "bounce" it through. I shall see when it is possible to publish the White Paper. We shall then discuss when a debate can be held, how long it will be, and what form it will take. That is the normal way of conducting our business. Over the weekend, I read the exchanges with my right hon. Friend the Leader of the House last Thursday, and he has pointed out that what he said was in response to a request for a debate before the negotiations continued. That is a different situation from the one that I am discussing, which is the publication of a White Paper at the end of June after the major items, we hope, have been settled. If the Leader of the Opposition wants a discussion about that part of the proceedings this week, we shall be prepared to discuss it with him.

Several Hon. Members: Several Hon. Members rose——

Mr. Speaker: Order. The topic for debate today is the steel industry. I do

not think that we should proceed further with this matter.

Mr. Molloy: On a point of order, Mr. Speaker. I wish to point out that, although many back benchers understand it is quite impossible for you to call every hon. Member to comment on the Prime Minister's statement, particularly since that particular statement and the Prime Minister's visit to France qualifies for the dictum by Burke as an event on which it is difficult to speak and impossible to be silent, nevertheless some of us would like to have questioned the Prime Minister. Back benchers such as myself would ask you to note, Mr. Speaker, that the same Privy Councillors who were called on an earlier occasion to put Questions to the Chancellor of the Duchy of Lancaster were called to question the Prime Minister this afternoon. Since the question of whether Britain wishes to join the Common Market is one of the gravest in our history, we now believe that the rule of giving Privy Councillors precedence should be dropped. We are of the opinion that the constituents of Ealing or Rugby are just as interested in this extremely important matter as are the constituents of Huyton, Bexley or the constituents of any other Privy Councillor. Therefore, we would beg you to consider this matter of precedence carefully so that the views of our constituents are given ample opportunity of expression in this House.

Mr. Speaker: I have great sympathy with what the hon. Member has said. I try to do my best, and this is one of the most difficult tasks I have to perform. I had hoped to give an opportunity to as many hon. Members as I could, but there was a rush of questions from the Opposition Front Bench, and as a result I was unable to call as many back benchers on the Opposition side as I had hoped. However, I will bear in mind what the hon. Member has said.

The following is the communiqué:
The President of the French Republic and the Prime Minister of the United Kingdom held discussions en tête à tête in Paris on 20th and 21st May, 1971. Mr. Heath also called upon Monsieur Chaban-Delmas on 20th May.
On the rôle of Europe following the enlargement of the European Economic Community the President of the Republic and the British Prime Minister had a thorough exchange which


showed that their views were very close. They expressed in particular their determination to contribute through the enlarged and deepened Community to increasing European co-operation and to the development of distinctively European policies, in the first instance principally in economic matters and progressively in other fields.
The discussion led to a complete identity of view on the working and the development of the Community.
The President of the Republic and the British Prime Minister considered the range of economic, financial and monetary problems which could arise as a result of enlargement. They also discussed the progress of the European Community towards economic and monetary union, and its implications for existing financial relationships. The Prime Minister reaffirmed the readiness of Britain to participate fully and in a European spirit in this development. These discussions produced a useful clarification of views which will provide a firm basis for the future.
The President of the Republic and the British Prime Minister took note with satisfaction of the agreements recently reached at the Ministerial meeting between the Community and the United Kingdom on 11th and 12th May on agricultural and industrial matters, and particularly on the application of community preference in the agricultural field.
The President of the Republic and the British Prime Minister considered that it was desirable and possible to reach early agreement on the main outstanding issues in the negotiations for British entry particularly the problems relating to New Zealand and the British contribution to the Community budget.
The President of the Republic and the British Prime Minister expressed their joint desire to resolve the problems which will arise from the renewal of the Yaounde Convention in a positive spirit and having regard to existing rights. It would equally be necessary to take account of the need to safeguard the interests of the countries who are, or will have the opportunity to become, signatories of that Convention and who are largely dependent upon the markets of the enlarged Community for their exports of sugar or other primary products.

Orders of the Day — SUPPLY

[20TH ALLOTTED DAY],—considered

Orders of the Day — STEEL INDUSTRY

Mr. Speaker: Before I call the hon. Member for Ebbw Vale (Mr. Michael Foot) to move his Motion, I wish to inform the House that I have selected the Amendment in the name of the Prime Minister and his right hon. Friends.

4.25 p.m.

Mr. Michael Foot: I beg to move,
That this House deplores the persistent uncertainty in the steel industry created by the pronouncements and policies of the present Government, and calls upon the Government to give steady backing to the British Steel Corporation in carrying through the greatly-enlarged investment programme in the industry which the national interest requires.
Perhaps I could satisfy my hon. Friend the Member for Ealing, North (Mr. Molloy) by reminding him that I speak in this House not as a Privy Councillor. Therefore, I hope that I will be able to represent some of the views he might wish to have put on some of these questions.
In moving this Motion, perhaps I may be permitted to suggest that there is a connection between the matter of supreme importance which the House has been discussing only a few moments ago and this debate which we are initiating on the steel industry. In seeking to illustrate the connection between the matter of Britain's entry into the Common Market and what might happen to the steel industry, perhaps I could quote a paragraph which appeared in the Sunday Times on 9th May in an article by Mr. Keith Richardson in one of the financial pages of that newspaper. In that article he discussed the connection, or alleged connection, between these two matters and the question, which has been mooted in certain quarters, that the Government might be eager to secure some foreign capital to be invested in the steel industry. What Mr. Richardson said at the end was this:
The possibility of foreign cash being used to buy off parts of the British Steel Corporation seems now more remote, however. One


British group has approached German steelmakers for financial support only to be told 'We see no point in investing in British steel, for once you are in the Common Market we shall put your steel industry out of business anyway'.
I do not subscribe to that doctrine. I do not believe that anybody, not even the present Government, wishes to put our steel industry out of business. I do not believe it can be put out of business. However, I believe that, whether or not we go into the Common Market, it is of the utmost importance that we should do everything in our power to strengthen the British steel industry certainly. If, by any misfortune, we eventually go into the E.E.C., we will need a powerful steel industry to sustain our place in the Community, and, if we stay out, a strong steel industry will also be very necessary. Therefore, one of the reasons that we are eager to have this debate is in order to examine what has happened to the steel industry over the past year and to discover what proposals the Government are now to bring forward.
The Government may well say that they would have preferred to have had this debate at a slightly later date when they could have come forward with the proposals which arose from the investigations which were announced by the Government in the debate on the steel industry on 18th March. But the settlement of the timing of this debate conforms exactly with the time available as laid down by the Secretary of State for Trade and Industry and his hon. Friends in that debate. They then said that they were undertaking an extremely urgent investigation into the steel industry and that they hoped they would be able to make their report to the House about this matter within six weeks or two months. The two months are now up.
The Minister for Industry said in that debate that he hoped that it might be possible that the period would be shorter, and I am sure that he must recognise that every day that passes prolongs the uncertainty in the industry. There are the most powerful reasons for the Government to announce their policy as speedily as possible. Therefore, even though the Government have told us that they are not yet ready to make this statement, we thought it right to go ahead with this debate so that the Government should once

again have the opinions of those who represent the steel constituencies when they go forward with their plans.
Although of course we regret the delay, we would like to have the right decisions after Whitsun than the wrong decisions before Whitsun. Therefore, if after Whit sun the Minister comes along with comprehensive proposals for removing the uncertainty which the Government have created in the steel industry, and if he outlines the long term proposals as a penitent sinner but as one who wishes to reform, there will be rejoicing on these benches and also, I gather, in celestial quarters as well. Therefore, we look forward to the statement to be made by the Minister, and it is in that spirit that we initiate this debate.
I am sure that the Minister will hardly wish to quarrel with the first part of our Motion, which deals with the present feeling of uncertainty in the steel industry. Anybody who has any knowledge of the steel industry knows that during the past weeks and months there has been serious uncertainty about Government policy and about what is to happen to the industry. Indeed, The Times Business Section in an article a few days ago described this uncertainty as "intolerable". The article went on to say that it hoped the Government in bringing forward their short term proposals would also bring forward their long term proposals. I will say a little more about that matter later.
Mr. Campbell Adamson of the C.B.I., who knows something about the steel industry, has also stressed the unhealthy nature of the uncertainty surrounding the industry at present. I am sure that the right hon. Gentleman the Secretary of State for Trade and Industry would not dissent from the proposition that he should end the uncertainty as swiftly as possible. If he cannot do so today, I hope he will recognise that we shall expect him to make his announcement immediately after Whitsun and that the Government will ensure that we shall have a further debate at that time.
What are the Government's reasons for intervening in the way that they have? I shall refer to the matter briefly, but it is necessary, because these are the grounds which the Government have put forward for intervening in the industry. They say that their action was necessary because of the mistakes or grievous errors in the


British Steel Corporation's forecasting. The right hon. Gentleman has quoted the figures on a number of occasions, as indeed have other Government spokesmen. Their charge has been that the British Steel Corporation was £150 million out in its forecasting.
The way that the right hon. Gentleman quoted those figures was most unfair. The new structure of the steel industry had been in operation for a short period only when this Government came into office. In July, 1970, the Steel Corporation prophesied a profit of £33 million for the year 1970–71. In fact, I understand that there will be a loss of about £14 million. We have to take into account also the increased revenue which the Corporation had from increased prices during the period of, I gather, £21 million.
If all those figures are gathered together, it means that the mistake in the forecast, if it can be put that way, amounted to £68 million on a turnover of £1,400 million. Of course it is a mistake. If the right hon. Gentleman examined the accounts of many other companies during the past year, I am sure that he would find that mistakes in forecasting had been about the same or worse. But the right hon. Gentleman has taken a figure of £100 million which had been mentioned previously by the Steel Corporation, which was certainly not an official figure and was hedged around with all manner of qualifications, and presented a picture or an accusation to the House and to the country that the British Steel Corporation have been most mistaken in its forecasting.
The whole premise on which the right hon. Gentleman acted was unfair to the Steel Corporation and gave an unfair picture of the real state of its finances. I mention that partly because the Secretary of State has used the argument so frequently and because the Government, on the basis of those figures, have taken the most extraordinary action.
Because of its difficulties, its financial situation, the general inflationary situation and difficulties with cash flow, the Steel Corporation had to go to the National Loans Fund to get extra cash in the latter part of last year. That is not an extraordinary occurrence. Indeed, the Corporation has a fairly good record in this respect. However, that is no reason for the Government taking measure after

measure to put the screw upon the industry. As I say, they took extraordinary action against this great nationalised industry.
Since January of this year the Government have insisted that major investment plans should be submitted, and resubmitted in certain cases, for investigation before the Corporation was given the right to go ahead. Since the debate on 18th March a joint steering group has been established which has conducted further surveillance over the industry, so that for the whole of the intervening two months nobody could know for certain where responsibility lay in the conduct of the operations of the Steel Corporation. It is partly on that account that we have had such confused answers from different Members of the Government about the various investment schemes throughout the country which are of such importance to the steel industry and to my hon. Friends who represent steel constituencies.
The right hon. Gentleman understands the situation perfectly well and he stated it fairly in the debate on 18th March when he initiated this joint steering group. He knew what was happening. He knew that the Government would hold up various investment schemes until they had examined them. We were not told how the process of examination would take place. The right hon. Gentleman understood that, but the Prime Minister and other Members of the Government did not, because when we put questions about the hold-up of particular investment schemes—for example, the investment scheme at Ravenscraig—we got contradictory answers.
We need not have much dispute on this matter. When some of my hon. Friends and I went to see the right hon. Gentleman recently to discuss the matter, he received us, as is natural, most courteously and discussed it with us. I asked—I am sure that he will not mind confirming it in the House—whether he would give a clear confirmation that, when he gave the interim report of the joint steering group to the House of Commons on its findings about the future of the industry, he would give an undertaking that absolute authority would be restored to the British Steel Corporation according to the Act of Parliament laying down its rights and responsibilities. The


right hon. Gentleman said "Yes" to the proposition that when the interim report was made—we had hoped to have it now, but I presume that it will be made immediately after Whitsun—full authority would be restored to the Corporation to go ahead with its jobs and thus remove the uncertainty which has surrounded these various investment programmes. He told me that that was going to happen, and that was confirmation of the interference which the joint steering group has been conducting during this period.
The Government held up all the major investment programmes of the Steel Corporation, but they have now released one or two. The Secretary of State for Wales announced the release of the Llanwern project, which had been agreed by the previous Government and by this Government, but which was held up by them. They have now revoked that hold-up.
We were told that Ravenscraig was held up under the same kind of arrangement, but the Government have not yet made any statement about their decision, so confusion remains. I have no doubt that my hon. Friends representing different steel constituencies will go through the list today and put questions to the right hon. Gentleman. I hope that he will have clear indications for my hon. Friends about the position.
Prior to the establishment of the junior steering group, or prior to the establishment of the surveillance which the Government made over the investment programmes of the industry at the beginning of the year, under the arrangements which had already been announced by the Steel Corporation, and confirmed by the Minister for Industry when he visited the area, Ebbw Vale was to have a new pickle line and the plans for going ahead were ready. When we get the single word, "Yes", the plans can be put into operation immediately. That is another project which is held up by the process which the Government have established for surveying all the different investment projects of the Corporation. Even a new precipitator for our open hearth furnace, which is essential for ensuring that we conform to the rules and regulations laid down by the inspectors who deal with these matters, is held up by the Government's restriction on the various invest-

ment programmes which should be going forward.
I ask the right hon. Gentleman to answer the following specific questions. First, will he reassure us that when he makes the interim announcement absolute full authority over all investment programmes will be restored to the Steel Corporation? Secondly, will he answer the question which I put to him in the debate on 18th March by telling us how much money has been wasted by the holding up of these programmes during these two months—the period will be over two months by the time he makes the announcement—because many of these programmes have already increased in quite heavy cost in the interim period?
The pickle line in Ebbw Vale will make a profit, and the quicker that we can get on with it the better for all concerned—better for the finances of the Corporation, better for our prospects in Ebbw Vale, and better for the nation as a whole. I hope, therefore, that the Government will give us an estimate of the extra cost that has been added to the burden which the Corporation has had to bear because of the Government's intervention.
The joint steering group which has been in charge of the steel industry over the last few months is a kind of constitutional monstrosity. It is a most curious arrangement that governing the investment programmes and influencing the pricing policy and recommendations about hiving-off of this great industry there should be a body on which sits representatives from the Treasury, from the right hon. Gentleman's Department, and from the British Steel Corporation, including Lord Melchett, the Chairman, himself. I think that if such a body had to be established the right hon. Gentleman himself should have presided over it. To have civil servants in charge of such a body is a most curious way to proceed, particularly when they are able to shuffle off responsibility from one to the other.
I am not claiming that the relationship between Parliament and the nationalised industries is perfect—I think that we have a great deal to learn about it—but every report that has been presented to this House in recent years, and in particular reports from the Select Committee presided over by my hon. Friend the Member


for Poplar (Mr. Mikardo), has emphasised how important it is to draw the lines absolutely clearly between the responsibilities of the Government and those of the Corporation. That is the only fair way to proceed. If those responsibilities are muddled up and the decisionmaking body is partly Civil Service, partly Treasury, and partly the Corporation itself, nobody knows whose is the responsibility for different matters.
It may be that one reason why that has been done is that the joint steering group has discussed, in some measure, the hiving off proposals. I am not sure whether that is the case. The Minister shakes his head, and I am glad to note that he dissents. Is he confirming that the hiving off proposals are not to be discussed by the committee that is to examine other matters, and that there is to be a quite separate body to examine that issue? That, too, is a curious constitutional arrangement, if there is a joint steering group to govern the whole of the immediate conduct of the Steel Corporation, and another body to discuss the hiving off proposals.
Whether the joint steering group has been discussing the hiving off proposals or not, I think that what the Government have been seeking to do in this respect is to persuade the Corporation to give some sort of support, backing or power, to the hiving off proposals which they wish to bring forward, because they need some support. The Government realise that they would have the greatest difficulty in getting any hiving off proposals through on their own recommendations, because everybody knows how prejudiced they are in their actions. They therefore want some support from the Corporation itself so that they can put the proposals forward and say that they must not be too strongly opposed by hon. Gentlemen opposite because they have the approval of the Corporation.
I hope that the Minister will not proceed in that way. I hope that he will take responsibility for any proposals for hiving off that are put forward. I hope that he will not try to implicate the Corporation in those proposals, because he knows as well as I do—and he can confirm it today if he likes—that the Corporation has, from the beginning, been opposed to all the proposals which have been made by some hon. Gentlemen

opposite for splitting up the Corporation. The Corporation has been opposed to the proposals for taking away whole sections of the industry, such as special steels, constructional engineering, chemicals or tubes. It has opposed all those proposals, and I hope that the Government will not try to conceal that fact.
What the Corporation has said—and there is no secret about this, because this is what it proposed to the Labour Government during their last few weeks of office—is that there should be a little hiving off in certain areas, and a little hiving on. That is a different process from the one which has been recommended from some other quarters. I hope, therefore, that the Minister will make it clear that there will be a statement in the very near future, which will carry forward the statement that he made in April, to the effect that bulk steel-making is not to be split, and that he has abandoned a large part of the hiving off or splitting up process which he had previously proposed. I hope that the Minister will undertake to make a statement on that subject, as well as on the financial questions which have been discussed by the joint steering group.
I do not want to embarrass the right hon. Gentleman. It may be that in this respect he has been fighting a good fight. He may have been somewhat late in coming to his conclusion, but I think that he has difficulties with which he has to contend—the Prime Minister, and some of the people in his Department—and some people say that we must regard the right hon. Gentleman as a good man who fell among Powellites. It may be that that is the position that he occupies in the Conservative Administration, but I hope that he will give a clear undertaking that the hiving off programme has been abandoned. I believe that that is how the Government's mind is moving, and I should like to assist the right hon. Gentleman in carrying through these proposals. I should like to assist him by what is known as the Kutuzov strategy of offering a golden bridge by which he can escape from the territory which he should never have tried to occupy.
We remember the Napoleonic flourishes of the right hon. Gentleman at his conference last autumn. We remember him talking about disengagement, hiving off, splitting up and selling off, but the more


he considered the question the more he realised that it was a hopeless cause and so he made his announcement of two or three weeks ago. We hope that very soon he will clear up the whole question, and thus avoid wasting time, energy and money on this whole business of hiving off.
To assist the right hon. Gentleman further, I ask him for an assurance, which I am sure he will wish to give me, about the steel industry. When we discussed the Coal Bill in Committee and in the House, we secured from the Government an undertaking that if any proposal was made for hiving off a part of the coal industry the matter would come before the House, and we would be able to debate it. That provision is written into the Bill which the right hon. Gentleman approved. I suggest, therefore, that he should give that kind of undertaking in respect of the steel industry. I do not want to celebrate a triumph too soon, but I hope that we shall be allowed to forget the whole matter once the right hon. Gentleman says that the sections of the steel industry which were not dealt with in his April announcement will be dealt with in his announcement after Whitsun.

Mr. Frederick Lee: My hon. Friend is speaking in the future tense. Does he realise that we are confronted now with the virtual hiving off the wire section of the steel industry, which is highly profitable? Irlam Steel has made profits for the last few months, and we have a problem now, let alone what might happen in the future.

Mr. Foot: I appreciate what my right hon. Friend says and the feelings of his constituents from Irlam, many of whom I believe are in the precincts of this House today making their representations. As my right hon. Friend will recall, when we had a meeting with Lord Melchett, the Chairman of the Steel Corporation, he made it clear that that was not a closed subject but was one on which representations could still be made. I am sure that my right hon. Friend would agree that much the best solution, if it can be secured by some different method, is for the Irlam works to be kept in being, as many of us would wish to see, under the Steel Corporation. That would be the best way to do it, but that is a matter for consultation between the unions, those

who work there and the Steel Corporation according to the undertakings given by the Corporation.

Mr. Churchill: As the hon. Gentleman well knows, the Corporation has no interest whatever in continuing its steel-making capacity at the Irlam works, and it has made this clear. In these circumstances, could the hon. Gentleman tell us where Her Majesty's Opposition stand if private enterprise was willing to make a bid which would safeguard the jobs of approximately 4,000 men who live with their families in that area?

Mr. Foot: There have been different statements of the kind of proposition put forward about the Irlam works. As I have said in reply to my right hon. Friend the Member for Newton (Mr. Frederick Lee), the proper way for this matter to be dealt with, immediately, is by further consultations between those concerned in Irlam, the unions and the British Steel Corporation.
If the hon. Gentleman turns to further questions of what would be the attitude of the Opposition or anyone else to propositions for maintaining the works or for fresh investment in different parts of the industry, I would not think it right for me to pronounce on any individual project without looking at the details. [Interruption.] I will come to the case put by the hon. Gentleman. The right hon. Gentleman in his statement made a proposal about inviting private capital into the industry and said that he would not impose severe or unnecessary restrictions if private capital was to come forward. He welcomed the idea of such private investment in the industry.
It was a very strange announcement to be made by a Government who at that time were holding up a whole series of investment projects in the publicly-owned section of the industry, projects which had been subjected to far more severe scrutiny, as I understand it, than any of the projects put forward about Irlam or anywhere else, for introducing private capital. What the right hon. Gentleman is saying is that he is eager to invite private capital into the industry for investment. By doing that he is going back, not merely on what was decided when the industry was nationalised, but on the general proposition accepted by everyone


who knows anything about the steel industry in this country, that there must be some central Government control of some kind, or some central board control over the various investment plans of the industry.
Without such control we will run into the trouble that we have had many times before in the industry whereby investment is begun in one area and then in another and one investment project cuts the other's throat. To some extent that is what happened between Llanwern and Ravenscraig, as many people will understand. Anyone who appreciates what has happened in the steel industry before would be very chary of thinking that the ideal way to solve the problem is to have increased private investment, particularly uncontrolled investment as the right hon. Gentleman was suggesting in his April statement.
It would be a retrograde step which could do great injury to existing projects and which could injure the whole, careful and ambitious investment plan which has been drawn up by the Corporation. When such proposals are made as the right hon. Gentleman has made, I wonder whether they are motivated by the desire to assist the industry or by a desire to injure public ownership.
Let me turn now to the question of prices which has played a big part in all these discussions. In some respects the most arbitrary action taken by the Government in interfering with the affairs of the steel industry was the way in which they interfered with the fixing of the prices. According to newspaper reports, the right hon. Gentleman is again on the side of the angels, if I can put it that way, The Sunday Telegraph of 16th May said:
The Prime Minister vetoed a demand in April for a 14 per cent. increase. The Cabinet halved it. Mr. Davies was convinced that the Corporation's case was just but he was overruled.
I do not expect the right hon. Gentleman to reveal when he was overruled or how, but that is the general supposition. To do the right hon. Gentleman credit, he did examine the case of the Corporation very carefully. He took some time to do it, but I suppose that was justified and certainly we on this side are in no position to argue that there should be no intervention at any time in the fixing of the prices of the Steel Corporation or other

of our major industries. Some of my hon. Friends, when they were in government, intervened to keep down the price of the industry's products. We could not argue that there should never be such intervention and I do not argue that.
I do say, however, that if there is such intervention that has to be taken into account in judging the performance of the industry. It is not fair to say, "We will restrict your price in what we regard as the national interest" and then to pillory the industry for not making a substantial profit. That is what has happened with the steel industry. If it had not been for the prices fixed by the Labour Government, the Steel Corporation would have made a handsome profit throughout the whole period of public ownership, which is more than could be said for some of the parts of the Corporation when they were privately owned.
That is the first argument. It might be that if it had not been for the prices fixed by the Labour Government the Steel Corporation would have made something like £200 million more during those few years, and that would have meant making a considerable profit in that period. The further reason why we believe that this intervention was unjustified is that it was discriminatory. If the Government are taking action to deal with fuel prices, cement prices or oil prices, seeking to restrain prices in those areas, there may be a case for saying that they have a right to do it with the steel industry. There is, however, no case for picking out the steel industry for particularly vindictive and discriminatory treatment, which is what has happened here.
There are no grounds for action which injures the position of those in the steel industry. What does the right hon. Gentleman think will be the effect of this interference with price on negotiations and relationships between the Corporation and its workers? Interference with the price interferes with the whole prospects of the industry. We say that the right hon. Gentleman should certainly look again, and immediately, at this question of the price which the Corporation was demanding. Apparently it was reported that he was in favour of the full increase or at any rate a larger increase


than the Government eventually conceded and I hope that he will give us an early statement on that point too.
The price affects not only the wages of steel workers and the profitability of the Steel Corporation and morale in the industry. There is also the question of what was raised by Lord Melchett and others long before this argument on price—that what the steel industry needs in Western Europe is greater freedom in making price decisions, and that if it is to be required to compete and to carry out huge investment programmes, it must have the power to makes these decisions as well. It is grossly unfair first to deny the industry this freedom which is exercised by practically every other industry in the country and then to assault and attack it because it has not achieved great profits.
Let me give a further reason why some of us regard this question of price as of major importance. What worries us about this arbitrary intervention on top of all the other actions which right hon. Gentlemen have taken with the steel industry—the clumsy way in which they have dealt with the investment programmes, the manner in which the joint steering group has operated, the way in which the affairs and energies of the Corporation have been distributed by the hiving off programme and the arbitrary intervention about the price and many other items which we have debated before, such as the abandonment of investment grants—all these matters which injured the profitability and financial position of the Corporation, is the effect that they may have—I do not say "will have" because we want to avert the catastrophe—on general investment programme of the steel industry.
I could quote the statement made by The Director, a paper I do not normally study with great care. In an article on 11th May it confirmed what I said about the way in which the Government had in effect taken over control of the industry, saying that by this action,
… the Government has committed itself to the active management of the British Steel Corporation.
The article dealt with the interim report which is expected by the Government as a result of the investment, and concluded:

The Government's urgent study of the financial structure of the steel industry must not result in Ministers becoming so preoccupied with today that they forget about five or ten years hence.

Mr. John H. Osborn: Would the hon. Gentleman also comment on the early part of the article, which says that the steel industry
… would not be in the mess that it is today had it not been nationalised after a long and bitter political battle."?
Would he read the whole of that article?

Mr. Foot: It is not really astonishing that some of the people who produce The Director are opposed to public ownership. They have been for years. The extraordinary fact is that, even though they have been opposed to it, they have now come around to the view that what is required is a long-term plan for the steel industry, which is something that the industry never had under private ownership. One of the reasons that it is in such difficulties today is because the hon. Member and some of his friends starved the industry of proper investment when they were in charge. The record of investment in the steel industry over the previous 10 years was a disgrace to this country and I am amazed that any spokesman of the steel masters should dare to raise his voice in the debate at all.

Mr. J. H. Osborn: I was only drawing to the hon. Gentleman's attention at this stage the content of the article to which he had referred. I will deal with the other matters if I am called later in the debate.

Mr. Foot: The hon. Gentleman was drawing my attention to the false premise; I was drawing attention to the correct conclusion—and it makes quite a big difference.
I say again to hon. Gentlemen opposite who have anything to do with the steel industry—not that there are many—that no one who bore direct responsibility for the low investment programme of the years before 1967 has much right to lecture the Steel Corporation today.
One of the achievements of the Corporation during this period has been to draw up a plan for the development of the industry over the next 10 years, to raise the figures of production—I will not go through the figures; right hon. Gentlemen know them—from £25 million to


more than £40 million. This ambitious and intelligent programme will cost a lot of money. There are many people in the steel industry who want to see this plan go through successfully. It is extremely delicate——

Mr. David Lane: The hon. Gentleman might at least do the House the courtesy of doing his homework before he lets loose a speech like this. He was accusing the former industry of having no long-term plan. Has he overlooked that, in the 15 or 20 years after the war, despite the threats of nationalisation from the party opposite, at least three long-term plans were drawn up and put into operation by, the industry?

Mr. Foot: I understand that, but the three long-term plans were derisory, compared with what was being done in most other countries. The percentage increase in production year by year in the steel industry for the 10 years prior to nationalisation was something like 2 to 2½ per cent. a year—a miserable record. There are people in the Corporation, whose names it would be improper for me to give, who were opposed to public ownership and who are now ready to admit that it is only through the combined, far-seeing, centralised programme that they can draw up a sufficiently bold investment programme.
There are people in my constituency and in the other constituencies represented on this side of the House who wish that programme put forward and pressed through successfully; so even more important than the interim announcement which the Secretary of State was to make is the statement which he will make later on about the whole future of the industry. We should like that announcement brought forward to a much earlier date, because we fear the consequences of continued uncertainty.
What the Steel Corporation is seeking to carry through is not a programme for feather bedding but a programme which will involve a considerable reduction in the total numbers of people who will be employed in the industry over these 10 years. That is a very difficult operation to carry out in a civilised manner, but if it is to be done, the workers in the industry must be assured that, as parts of the industry are run down and as

some closures may be made—some closures will have to be made—at the same time the development part of the programme is going ahead at a steady and improving pace.
So every time, when there is an intervention which causes redundancies, without the guarantee that the plan is going ahead, this causes difficulties. I know what happened in my constituency, and it is the same in all the other steel plants of the country which are to be sustained as part of this programme. We must give the workers in the industry an assurance that the industry itself will not be run down—rather, the industry will be raised to a peak which we have not known before. That is what the Steel Corporation has planned for and that is what the Government should back. That is where the Government should be giving their encouragement and support.
The opposite will happen. My fear is that, if the Government continue with all these impositions, restraints, restrictions and interferences in the industry, there could be in the steel industry the same kind of situation as there was in the coal industry, which was run down too fast, in my opinion and those of the National Union of Mineworkers and the National Coal Board. It was a decision taken by the previous Government, which some of us contested. But they ran it down too fast, and now there are problems in building it up again. In the steel industry we can learn from that. We can combine the two processes. At the same time, if we can carry the confidence of the people in the industry, we can carry through the great transformations which have been needed over the last 20 years and the great expansion which we have needed as a great industrial nation. We could carry it through. That is the prospect on one side.
The prospect on the other side is that demoralisation in the industry will go so deep and the interference of the Government will be so continuous that morale will be broken. That would be a catastrophe not merely for the steel constituencies but for the country as a whole.
Therefore, what we fight for in the debate, and what I hope the Government will support, is that we should give the British Steel Corporation one of the great


advantages in carrying through this programme—that the leadership of the Corporation commands support and confidence amongst the people who produce the steel up and down the country. If the Government destroy that confidence they will have done the greatest possible injury to an industry on which all other industries depend.
I hope that the right hon. Gentleman and his Government will start approaching the affairs of this industry in a very different mood. I believe that the right hon. Gentleman has learned a great deal about it during the past year. I hope that when he comes forward with his interim statement, if not today, he will be restoring to the British Steel Corporation the power and authority and the financial backing to carry through the great expansion of the industry which the national interest requires.

5.12 p.m.

The Secretary of State for Trade and Industry (Mr. John Davies): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'endorses Her Majesty's Government's decision to undertake thoroughgoing reviews of the financial performance of the British Steel Corporation and of the structure and future development of the British Steel Industry'.
Before coming to the real meat of the debate, I deal with three questions, all of which have been raised, in one form or another, by the hon. Member for Ebbw Vale (Mr. Michael Foot). The first relates to the complaints that the first phase of the review now being carried out has not given rise to a statement before this debate or during the course of it. The second matter is the charge that the institution of the review which has been put in hand has led to a serious deferment of investment plans within the industry. The third matter is the imputation which has arisen that there is a deterioration in the relationship between the British Steel Corporation and the Government and that the discussions which have taken place have been in an atmosphere of hostility.
On 18th March, during the debate on the steel industry, I said that I hoped that the first phase of the review would be completed within six weeks to two months. In fact, the results of the study

were put before me only last Thursday and that represents a slippage of two days only with regard to the target I set. I should not have thought that that was too bad. The predictions that I made in other debates and at various Question Times are also borne out in exactly the same terms. I cannot accept that this review has been late in coming or that the House has not had the chance of a sight of it which it expected.
I made it perfectly clear that once I had the first phase in hand I should need to devote some considerable time to considering the recommendations put before me. In any case, if account is to be taken of points to be raised in this debate, obviously there has to be a certain amount of time before I can make a statement.
During questions on the Business statement last week, the hon. Member for Motherwell (Mr. Lawson) said that, in discussions with a group of Opposition Members, I had given an undertaking that I would make a statement before Whitsun. This is not correct. I said to him and to other hon. Members that I hoped very much to do so but that I could not give an undertaking. As things have turned out, I am not able to do so and take into account what may go on today.
A word on the subject of deferment of investment plans. This has been a subject which has created a great deal of heat, and I fear that the situation is still not perfectly clear. First, the terms of reference given to the joint steering group were given in mid-March, and they do not in any way relieve Ministers of their responsibilities. The object of the joint steering group is to analyse the problem and to make recommendations. This they are doing, and it is these recommendations which Ministers have to consider.
What I said on 18th March was that I would need to call for a deferment of all starts of new projects from that date until this first phase had been completed. Equally, I said to the Corporation that I wished it to inform me of any new projects which it wished to start before that first phrase has been completed so that I could consider them. I did not conceal for a moment—I accept what the hon. Gentleman said—that that was


a limitation on the chairman's normal authority. In other circumstances, he would be entirely entitled to proceed with the investment project in accordance with the programme laid down and agreed with me last autumn to the tune of £185 million. I did so because it seemed that with this major review in hand, it would be wrong to proceed willy nilly with all the projects approaching without further consideration.
Lord Melchett understood the reasons for my request and readily accepted them. Since then—this is the point about which I must give some clarification to the hon. Gentleman——

Mr. John Mendelson: He had no choice. You imposed them.

Mr. Davies: I simply say that he readily accepted them. I hope that the hon. Member will not question the fact that he did. I assure the hon. Member that he did so.
The point which is, perhaps, slightly clouded is that since that time, Lord Melchett has put to me only one new start which, because of the hold-up that I had requested, would not have proceeded—that is with regard to Llanwern. It took us a few weeks to reconsider that and to give the go-ahead. The extent of deferment, such as it is, revolves around that single project. The Ebbw Vale pickle line, for instance, has not been submitted to my investigation.
In a more general sense, it would be quite wrong to imply that the Government's attitude will bring about a fall of investment in the industry. On the contrary, the curve of investment in this industry during the period since nationalisation shows that relatively low figures occur in the early years—£62 million in 1968–69, £81 million in 1969–70, and £140 million in 1970–71. With a programme agreed of £185 million for 1971–72, a large part of which, in any case, is in course of commitment, it can be expected that e investment this year will also be very considerable.

Mr. Eddie Griffiths: Is this £185 million, before price escalation, what the Corporation anticipates spending this year, or is it the cost of projects some part of which will be spent next year? Is this money to be spent during this financial year?

Mr. Davies: Yes, it is the amount anticipated to be spent in this financial year, including, therefore, the continuation expenditure for projects already in course and the institution of new projects.
As regards the question of hostility between the Corporation and the Government, I am very conscious of the frequent allusions to these alleged tensions. I want to refute them. It is obvious that, when one is consulting on these quite difficult issues, there are undoubtedly differences of opinion. How could it be otherwise, and what would be the use of consultation were it otherwise? It would be very misleading to read into them any great sense of hostility between the Corporation and the Government. It simply does not exist.
Moreover, I would refer in the same sense to the question of uncertainty. The hon. Member for Ebbw Vale had much to say about the state of uncertainty which had been created in the industry. Any uncertainty which has resulted from the reappraisal which we have set in course pales into insignificance in relation to the uncertainty which was caused in the industry throughout the whole of the decade of the 1960s and the suspense in which the industry was held as a result of the policies of the Labour Government.
We have had over the last few months a considerable number of debates and discussions on the steel industry. I certainly make no complaint about them. I believe that it is an absolutely key industry in many respects, whether it be in respect of manpower or investment, and particularly, perhaps, in the way it permeates every other part of British industry. It warrants a very special place. It warrants very close attention. It is certainly getting it.
We have in past debates covered very largely the question of the B.S.C.'s financial and operating performance and its manpower policies and decisions in relation to that. I do not propose to go over the ground again.
The hon. Member for Ebbw Vale sought to correct the figures which I gave some time ago on the subject of the apparent deficit—the turn-round in the performance of the finances of the Corporation. I realise that there can be contention as to what figures were given


as positive estimates and what were given as generalised indications. What was of fundamental importance was to get a proper forward estimate for this year's out-turn—the out-turn for 1971–72—rather than for the past year to which the hon. Gentleman was referring. Therefore, I would not propose now to go over all that ground again. It relates largely to the past, and what I think we are all concerned about is the future.
I want to say a few words on the reasons, because the hon. Gentleman questioned them, why we decided to carry out a very complete reappraisal of the Corporation's future, both in terms of its development and of its structure. I do not think that there could be any real disagreement that over the post-war years the industry has failed to undertake the level of investment and to rationalise its operations in a manner allowing it to retain its position as a leading steel industry in the world league.
That a major factor in bringing this about has been continual changes in status and great uncertainty cannot be seriously disputed. Although so much of the former Government's 1965 White Paper contained unwelcome views to my right hon. and hon. Friends, who were then in Opposition, we can only concur with its objective, which was to secure a positive development of the industry as a whole, even though we entirely deplore many of the methods which were advised in that White Paper as being the ways to achieve it.
It is interesting to recall the views expressed by the right hon. Member for Barnsley (Mr. Mason) in the debate on the 1969 Act, when he commented as follows:
The corporation took over the industry at a low point in its fortunes … already, we can see a distinct improvement …
Referring to the introduction of public dividend capital the right hon. Gentleman said this:
Looking at the next few years as a whole, there would seem to be ample justification for this further experiment … an experiment I feel confident will succeed."—[OFFICIAL REPORT, 8th May, 1969; Vol. 783, c. 685–6.]
Yet as we have taken stock of the situation since last summer we found an industry which had continued to operate in deficit, whose forecasts gave little prospect of doing otherwise without disturbingly

high price increases, and whose long-term investment programme to put it back at the top of the world league was enormous and would make vast calls on public funds.
Faced with this paradox of unprofitability on the one side, and vast investment plans, on the other, it was only right that the first line of action should be to carry out a very penetrating reappraisal of the industry's future both in respect of its financial and its investment objectives—long and short-term—and in respect of its structure, to ensure that it was organised in the best way possible to face the future, There was certainly nothing doctrinaire or prejudiced in either of these lines of inquiry: quite the reverse. The whole object was and is, after years—almost decades—of change and dislocation, to set the industry on a new and resolute long-term course determined only on the score of its own best interests.
This penetrating reappraisal is composed of four inter-related but separate studies. The first is that which has just come into my hands—the financial review for 1971–72. The second is that which constitutes the next phase of the economic review and seeks to chart a strategy for the industry for the present decade. The third, which runs in parallal with both, is the structural examination of the industry with a view to defining on a rational basis what broadly should remain in the public sector, what should be in the private sector, what should stand between the two, and how it should be done.

Mr. Michael Foot: When does the Secretary of State expect that the Government will come up with final proposals on the final matter? How long will that cause of uncertainty be allowed to continue?

Mr. Davies: I intend firmly to do so.

Mr. Foot: When?

Mr. Davies: I intend firmly to answer the question. The hon. Gentleman also asked whether this was being carried out by the joint steering group. It is not. It is carried out directly between the Ministers concerned and the Corporation.
The fourth part of the re-appraisal is the reorganisation of the relationship between Government and Corporation aimed at ensuring to the former an ability


properly to discharge its responsibility to Parliament and to the public and to the latter the freedom to manage its own affairs within agreed authorities and for the attainment of agreed objectives.
I should like to say something about each of these four parts. As to the short-term review, here we are concerned with achieving the best result we can in this current year—1971–72. We will take all relevant factors into account, including price factors and including not only home price factors but competitive prices abroad. As I have said, I plan to make a statement to the House after the Whit-sun Recess to make known the decisions I have arrived at in the light of that study.

Mr. Michael Foot: Mr. Michael Foot rose——

Mr. Davies: May I continue and perhaps answer the hon. Gentleman's questions almost as he poses them?
These will cover, first, the expected out-turn of the Corporation's operations in this financial year; second, the investment programme authorised to be undertaken, bearing in mind the previous figure to which I have referred of £185 million; and, third, the extent of funding from public funds as opposed to those generated from within the Corporation.
An indication of the size of the figures involved is to be seen in the White Paper, Cmnd. 4635, where a figure of £289 million as a call on public funds was indicated for one year.
The second part—the longer-term review—is a question, as I have said, of charting a strategy for the industry. The hon. Member for Ebbw Vale said that this had never existed under private ownership. The hon. Gentleman may have forgotten that in 1966 Sir Henry Benson produced a complete forward study of the industry's investment requirements. What is certain is that during the course of the previous Government's tenure there was not such a positive long-term investment programme. This longer-term review will be difficult, ambitious and complex. It will form the framework within which this great industry will evolve in the future, in both its national and international context. It will require a very great effort and—this may prove a disappointment to the hon. Gentleman—I shall be surprised if all those concerned can bring it into my

hands any earlier than I have indicated already. I said the autumn. I am confidently hoping to have it before the end of the year. It will be a mammoth task to perform.
It will cover the following matters: the expansion of, and consequent investment by, the Corporation at home, including the principle of a major new green field site; the means by which the Corporation will secure in the long-term adequate supplies of ore and coking coal, with particular concern for the forecast short-fall of world supplies of the latter; the assessment of the desirability of undertaking a greater manufacturing operation at the source of raw material supply, perhaps in Australia, by pelletisation or some such process.
It will take into account the general assessment of the impact of major technological changes which are taking place in the industry. It will consider the scope for international partnerships in manufacture or in raw material procurement or in capital provision. It will concern itself with the critical importance of the industry to the Government's regional policies, bearing in mind that, today, about 50 per cent. of the Corporation's manpower is employed in development areas. It will deal with the manpower consequences of alternative solutions. That those consequences entail a considerable reduction in the ratio of numbers employed to production is known to all. As with the coal and textile industries in the post-war years, to which the hon. Member referred, it is no good concealing that the re-creation of a dynamic and prosperous steel industry in this country will not be attained without rationalisation of the same kind, if not on the same scale.
What is essential is to see the future clear and to be able to plan for it: to ensure that redundancies are anticipated and preparations made for them in good time; to ensure that the imaginative and effective provisions of the Corporation and the Government, in consultation, in forewarning and in shielding those concerned are brought into play at an early date and in an effective way.
That will be the broad area covered by the longer-term review. It will be a major exercise, and it will form the framework within which, I hope, the steel


industry will attain again the kind of importance which it has had in the past, to, which the hon. Gentleman referred.

Mr. James Callaghan: That list of criteria did not touch on one question: how does the British Steel Corporation determine what the growth rate is to be? Is it advised by the Government? In other words, how does it determine the level of demand it is supposed to aim at over the next ten years, or whatever the period be?

Mr. Davies: The right hon. Gentleman will be aware that, in terms of defining major development, this industry is not subject to very fine tuning arrangements. It moves forward in rather large bounds. This is particularly so at present. Although forecasts of likely development of demand are of great importance, they are not, perhaps, as easily tuned to in steel as in some other industries.

Mr. Callaghan: How does it find out?

Mr. Davies: It finds out as a result of the consultation which it has with the Government. This is one of the purposes of the review.

Mr. John Morris: I do not follow the point which the right hon. Gentleman is making. I fully understand the difficulties in tuning to particular needs or demands, but how is the British Steel Corporation to be told over the next 10 years, say, what is the estimate for that period?

Mr. Davies: Clearly, forward estimates of demand for steel and its various products are a necessary part of the estimation. The right hon. Gentleman probably knows that forward estimates of this kind are made in broad brackets of alternative levels of supply. This, clearly, will be part of the basis of the appraisal.
Now, the structural examination of the industry. I have already announced what I think was the major conclusion of this work, namely, to leave the bulk steel making activity intact within the frame work of the British Steel Corporation. We are now making progress in reviewing with the Corporation the remaining parts of the industry. The hon. Gentleman asked when I hoped to be able to make a statement about this subsequent part of the review. I hope very much to be able

to make this statement also shortly after Whitsun. It will give an indication of the arrangements which have been discussed and agreed—agreed with the British Steel Corporation, despite what the hon. Gentleman may think—and I shall thereafter continue to keep the House informed on any subsequent developments.
I come now to the fourth part of the reappraisal, that dealing with the relationship between the Government and the Corporation. As the House knows, I am anxious to disengage from excessive involvement in the management problems of the Corporation. A whole series of circumstances have combined to procure a closer involvement than I should wish, notably the scale and the scope of the reappraisal which I have been describing. When the reappraisal is completed, the course will be charted for the future, and the final section of this very great undertaking will come into play, namely, the guidance and control mechanism which has itself been the subject of careful and prolonged study. This will allow for objectives to be set, for programmes to be agreed, and for both to be monitored in an orderly manner so that the management can proceed on its way in confidence and the Government can be sure of how the Corporation is progressing along its planned path.
By the time that is finished, the reappraisal will have constituted an enormous task of prediction and planning appropriate to the scale of this vast industry. It will, I believe, have set the industry on the course of regained prosperity and confidence in its own future.

5.36 p.m.

Mr. James Tinn: Although this is not my maiden speech, hope to be forgiven if I say a few words about my constituency. From time to time, I have found a certain misconception or misunderstanding in some people's minds, and the thought that Cleveland is in the State of Ohio in the United States. Lest there is any hon. Member under that misapprehension, I should make clear that Cleveland lies on the northern aspect of the lovely Cleveland hills, on the coastline stretching from a few miles north of Whitby, including the old ironstone mines, of which the villages and settlements have new gone, Skinningrove iron works being the sole remaining outpost of steel in that


locality. Swinging then north and west to the Tees, one comes to the tremendous steelworks on the south bank of the river, including the development at Lackenby.
To a visitor, Tees-side must seem to have an air of purposeful prosperity. He will see the tremendous physical investment there, the largest petro-chemicals complex in the world at the I.C.I, works at Wilton and Billingham, the oil refineries on both sides of the river, the tremendous port development, and the land reclamation works; and he may have heard that this is the only area of the northern planning region which has over the years experienced an inflow of population rather than an outflow.
A visitor may in that way form a favourable impression. But what he might not see, unless he looked closely, would be the length of the dole queues. Paradoxically, and sadly, although Tees-side and Cleveland have seen the injection of scores of millions of pounds of capital, the dole queues seem to have grown longer all the time.
The oil refineries do not employ many men. I.C.I. has been shedding labour by what is euphemistically called natural wastage, which, in practice, tends to mean that the older workers are shown the door even more brusquely than usual, while school leavers and others find the door closed against them.
As a result, on Tees-side, despite the impression that a passing visitor might have, we already have an unemployment rate which is only marginally lower than that of Tyneside. In terms of numbers, we have more men unemployed than even on Wearside. It is no consolation to an unemployed man to know that the unemployment rate in his area is a little lower than in another. Yet Tees-side, for some reason, is excluded from special development area status.
Our concern today is to look at the steel industry, especially in the light of recently announced plant closures. As I mentioned a moment ago, our unemployment rate is already tragically high, but by the end of this year it could be disastrously higher, because of the area's dependence on steel, for the reasons I have endeavoured to outline. Estimates which take account of previously announced steel closures, in addition to those more recently announced, show by the end of 1971 unemployment on Tees-

side could be over 8 per cent., and, in the nearby Hartlepools area, approaching 15 per cent. Surely, by any measure, in any year, by any standards, those figures must be regarded as appallingly and unacceptably high. If those figures had already been reached we should be pretty near the top of the unemployment league. But in this year who knows, when the time comes, what area will be able to claim that dismal distinction.
On Tees-side, however, as I have hinted, there is at least one immediate and practical step which the Minister could take and which lies to his hand. That is to grant the area special development status immediately. Its exclusion can no longer possibly be justified. It is the least the Government can do, and it is something that people of all parties and none on Tees-side unit in demanding. In this I am sure that I have the support of the hon. Member for Middlesbrough, West (Mr. Sutcliffe). I ask the Minister for some assurance on this point. The need is already urgent; it cannot wait.
With regard to the general state of the steel industry, those of us who have worked in it for years have a depressing feeling of having been here before—in fact, of having been here several times before. It has been a traditional problem of the industry that when there is a shortage of steel it is blamed for having failed to lay down sufficient capacity to satisfy the excess demand; yet, in no time at all, it seems often to find itself with a fall-off in demand, with excess capacity resulting in many families losing their livelihoods. It is a spectre that has always haunted the industry and inhibited its planning. But we had every hope—and now I am speaking from the point of view of the trade unionists in the industry—that the Corporation was trying to break free from this crippling cycle, that it was looking ahead, taking a long-term view, the broad international view, in terms of competition and of technological development.
We believe that it was planning to provide this country with a steel industry equipped to cope and compete with the best in the world. That is why the steel-workers, to an extent I believe to be unparalleled and without precedent in British industry, have co-operated with the Corporation in its plans for the future.


Inevitably these have meant savage redundancies. The right hon. Gentleman does not need to tell us that; it has been long appreciated in the industry.
Even though the Corporation did its best to improve consultation and to take social factors into account, as it is required by Statute to do, the impact on the men and their families is bound to be savage. It is not easy for those of us more comfortably situated to appreciate what it means to a man who has worked hard on a 24-hour shift system, on bank holidays, at Christmas and at New Year as a matter of course, with skill and responsibility, in an arduous industry where poor working conditions and danger usually go together, but who has, nevertheless through the years managed to attain a position of some responsibility, to find that those years have been wasted and that he can be thrown aside in his mid-forties or fifties as "surplus to requirement".
There is a special quality about the average, typical steelworker. It is an industry which almost seems to breed its own kind of man. Fathers and sons tend to tread the same path—to the blast furnaces, to the melting shop, to the coke ovens, to the mills. They are hard men, yet generous; tough, but friendly; steady, loyal to each other and to their industry; loyal to their firm, even when they are cursing the day they set foot in it. These men, committed to and dependent upon, British steel, have co operated in its plans for its future which threatened their own.
Let me give the House some idea what the cold phrase "technological development" means in real terms to these men and their families. The basic oxygen steel-making process now being introduced can produce an amount of steel in a period measureable in minutes which previously would have taken many hours. It can replace 14 open hearth furnaces with two or three of the new units. It can reduce a labour force of over 2,000 to under 400. These are the facts that were faced up to. It can produce catastrophe in just as many homes if nothing is done, and done in time, to replace each job lost with another gained. The fact that the men and their unions have co-operated in this

and similar developments puts a heavy responsibility not just on the Corporation, but on the Government and the country; otherwise, let us stop the cant and hypocrisy of blaming those workers who are sometimes less ready to accept new methods. Let the community face up to its responsibilities in good time, or let the workers and the trade unions look after themselves and their interests alone.
These men are not whining that the country owes them a living; but it does owe them a decent job. We owe their sons and daughters the same range of jobs and career opportunities as they would have had if they had lived in economically more favoured areas. I am sorry to say, even after what the Minister said, that there are disturbing indications that the Government do not fully accept, and are not fully prepared to honour, their obligations in this regard. I hope that we shall have further reassurances on this later.
I will not take up time in repeating criticism of the Government's action over the proposed price increase. But I take the Minister up strongly over his reference to the monopoly position of the industry. Steel can never be a monopoly as long as its customers can buy abroad. But why should they buy abroad when British steel is cheaper than steel on the Continent, as it has been in most cases? As my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said, had the Corporation charged European prices when demand was high, it would now be £200 million better off and would not have needed to put itself and the industry in pawn to the present or any other Government. The critics of public ownership should bear that in mind, and that cheap prices to private enterprise are subsidies in reverse.
But the industry is in pawn to the Government. Its ambitious £3,000 million modernisation programme is undergoing review. The slide rule is being run over it. I am not sure who is doing that, but someone is doing it. The Minister assures us that Lord Melchett has been very co operative. If Lord Melchett and the Corporation have lain down so quietly under this treatment, it is not only capital but a good shot of adrenalin which the Corporation needs to make a more vigorous response to this kind of interference.
I hope that the danger of making a long-term review at a time when the future seems clouded by the present state of trade will be fully borne in mind. The Minister referred to the world shortage of coking coal. At a time of depressed demand for coal, the Labour Government—and I recognise that—closed mines in my part of North-West Durham which produced some of the finest coking coal in the world. I am glad to see my hon. Friend the Member for Consett (Mr. David Watkins) nodding agreement. They were closed because of what the experts said. Some of us did not agree with them. I am afraid that the same calibre of short-sighted experts, with their slide-rules, will be telling the Minister that, from today's viewpoint, the future demand for steel will be much lower than eventually proves to be the case.
I have spoken with some feeling of the sacrifices that the steel workers and their families have been prepared to make to ensure the future of their industry. Now much of it has been called into question. On Tees-side we were braced to accept heavy redundancies—although we did not expect them so soon—but we had promises of vast new development based on the iron ore terminal. Cannot the Minister give us some assurance, even before the long-term review is completed, that these developments will go ahead and that we may have a completely new brown field site based on Tees-side? I assure the Minister that if he has doubts about the viability of British steel on Tees-side he is calling into question the viability of British steel as a whole, because this deep-water site is perfectly situated, and will have the most modern ore-handling equipment, a labour force ready to hand and all the locational factors in its favour. If British steel cannot prosper in that area, then perhaps we had better give up and start buying elsewhere. I believe that it can and will prosper. I hope that the Minister will do his utmost to give some of the assurances for which I have asked.

5.54 p.m.

Mr. John H. Osborn: My right hon. Friend the Secretary of State is as aware as I am that when discussing this particular subject in the House it is dangerous to pay compliments. The steel industry will be relieved that the hon. Member for Ebbw Vale

(Mr. Michael Foot) has not its destiny in his hands and will greatly appreciate the statement made today, in addition to the one which was made on 27th April, by my right hon. Friend.
I intervene in the debate with some trepidation as I have not spoken on this subject for two years, largely because, it has been claimed, I have an interest in the private sector, which is in competition with the public sector. There are trade associations and professional bodies where management, technologists, scientists and engineers from competing organisations in the public and private sectors meet. I have continued to attend their meetings, and many have claimed that I had as much right to speak for the public sector as for the private sector, because my interest lies in the steel industry and my constituency is concerned with the public and the private sectors.
There have been continuing discussions in Sheffield and elsewhere about what should be the right balance of plant, the economics of manufacture in this new age and how much more rationalisation should take place. As an outcome of that, Sheffield Rolling Mills—a combination of the Tinsley Mills of the English Steel Corporation, Balfour Darwin and Hallamshire Steel—was created by the Labour Government.
In my discussions, particularly with those who work in the industry and those connected with the trade unions, including B.I.S.A.K.T.A., I find that there is an increasing realisation that our productivity is still way behind that of many other countries. I have been told that the modern plant is capable of producing 700 tons per man per year. Some of the better plants in America are producing 300 tons. The American average is 200 and the United Kingdom average is 100 to 125 tons per man per year. I should like my hon. Friend the Minister for Industry to comment on the productivity in other countries compared with that in this country.
Trade union leaders are aware of the need for modernisation. As someone involved in the industry, I have emphasised in the House over the last 10 to 12 years the need for continuing capital investment in industry, as well as in the steel industry. Those who have spent their working


lives in the industry want a healthy bulk steel industry and a healthy carbon steel industry as well as a healthy alloy, special and stainless steel industry. They want to see a healthy private and public sector activity. It is generally regretted—and I made this point when I intervened in the speech of the hon. Member for Ebbw Vale—that as a result of nationalisation so much rests with the Government and that so much decision-making is not being done outside Government. There is resentment that steel is being debated with such intensity in the House, because it is thought that these issues would be more effectively dealt with outside the House and away from Whitehall.
I wish to ask my right hon. Friend the Secretary of State a few questions. The first concerns the headquarters of the British Steel Corporation. It was reasonable to move from a regional to a product basis, but the result was another round of musical chairs within the Corporation, and this led to greater bureaucracy combined with a policy of centralisation. During the Committee stage of the 1966 Iron and Steel Bill—the Iron and Steel Act, 1967—hon. Members on both sides hoped that a massive headquarters would not be erected in London but that it would be situated outside London. May we have more information about the size of the headquarters in Grosvenor Place, how many staff are employed, the annual salary bill and what it is costing to run?
I ask that because a retired manager of a plant in Sheffield, which, in my view, probably has a turnover of £20 to £25 million a year, said that, of his total overheads of £3½ million, £2½million represented plant overheads and £1 million went as a contribution to the headquarters in London, and he wished to know what good it was doing. I should like my hon. Friend the Minister for Industry to try to give an answer, as this is but one example of the unease which is developing in Sheffield.
Of course, at local and plant level there is need for greater autonomy. There is a view, which is prominent now, that at the headquarters with all its complexity, there are too many economists, statisticians and whizz kids. Therefore, I draw my right hon. Friend's attention to the fact that there is growing resentment in Sheffield, in the public sector, of course,

but in the private sector, too, that the real decision-making has been taken from the city which knows how to run its own affairs and that the real decision-making is now in London, and even the special steels division has not the autonomy which many in that division would wish to see.
The new Sheffield management in the steel industry, public and private, realises the value of the corporate plan, modern management techniques, including computer technology, but holds the view that more of the decision-making should be at local level. I hope, therefore, that my right hon. Friend is aware that Sheffield wants to be allowed to manage the industry which it has known for years, and wants to see less decision-making being done in London, in Whitehall and Westminster.

Mr. Thomas Swain: The hon. Gentlemen is expounding the management's point of view, but is he aware that this is not a view shared by the trade unions?

Mr. Osborn: May I read the next sentence in my notes? This view is shared by the shop floor as well as management to an increasing extent. I thank the hon. Gentleman for his intervention. I will show him my notes, if he doubts me. I read from page 7 of my notes.

Mr. Eddie Griffiths: Will the hon. Member allow me?

Mr. Osborn: Let me finish this please, otherwise I shall make a longer speech than I intended.
The United Steel Company, for instance, perhaps the most progressive steel company in Europe, and highly profitable, some five to ten years ago, now finds morale from top to bottom at a low ebb. In Sheffield there has been reported the highest unemployment figures for 30 years.

Mr. Eddie Griffiths: The hon. Gentleman is making the point that the shop floor supports the view for autonomy in Sheffield. Will he accept from me that shop stewards and shop floor representatives at Firth Brown sent a resolution to the Labour Party headquarters demanding that Firth Brown, which has probably the biggest private sector plant in Sheffield, ought to be nationalised?


Will he also accept the view that we are being inundated regularly by demands from Shepcote Lane rolling mills that the Corporation should take over 100 per cent. of that plant?

Mr. Osborn: I think that what shop stewards say does not necessarily reflect the view of the shop floor.

Mr. T. H. H. Skeet: Just misguided.

Mr. Osborn: The fact is that there is unease, and, firstly, the blame for this must rest on hon. Members opposite and their decision to nationalise, and then to renationalise after denationalisation. Secondly, there is some responsibility on management of the British Steel Corporation at the present time.
At a private gathering I was talking about the difficulties facing Lord Melchett and Mr. Finneston, and the scale of activities which they must resolve. The Minister should know that there is growing unease not only by some in the public sector but by its customers and suppliers, that if there are difficulties it was Lord Melchett's and Mr. Finneston's responsibility for taking up this impossible task given to them by the past Government. It has been to my surprise that I have been criticised for understanding and supporting this task which was placed upon Lord Melchett. But my right hon. Friend should bear in mind that Lord Melchett and those running the British Steel Corporation are subject to growing criticism.
Because it brought about more certainty I welcomed the statement of 27th April that the industry should remain intact. It is quite obvious that I would wish Lord Melchett to stay in this position, but I think that that outside anxiety should be noted. I shall read my right hon. Friend's pronouncement about the future of the industry with very great interest, because obviously we are not going back to separate companies as pre-1967.
The question of fair competition arose in our debates on nationalisation and the public sector is competing with the private sector, not only in steel, but throughout industry, for capital. Fair trading and fair competition will, I hope, be looked at, but what is important, and my right hon. Friend pointed it out, is that we

are talking of an investment of £185 million this year and an investment to build up to £290 million, I think my right hon. Friend said, in future years. This is an immensely greater investment than had been undertaken by the steel industry, even in the years of the Labour Government.
With this investment the question of pricing arises as well. It would be useful if we could have some indication about international prices compared with those now being set as a result of the increase of 7 per cent. instead of a 14 per cent. addition after the April discussions. It is fair to say that the average increase in steel prices from June, 1969, to April, 1971, has been 23 per cent. It is not as great in the case of alloy steel, much of which is made in the private sector. Carbon billets, I am assured, have gone up by a much greater figure than this; namely, 36 per cent.
In the private sector there are many companies which have to purchase material, including billets, from the public sector. It is possible that with the best will in the world, manufacturing suppliers are tempted to supply to those who carry out finishing operations in competition with their own subsidiary activities at unfairly high prices unless there is competition. When the industry is restructured it would be right for my right hon. Friend to be aware that the private sector desires an alternative supply to the public sector for its billets, so that there can be competition. This, no doubt, will come out in the November Memorandum, but I hope my right hon. Friend will comment on this.
As regards prices, the British Steel Corporation must be given freedom, but if it is to have freedom of prices, then not all the capital it requires should come from the Government. Whilst I welcome the statement by my right hon. Friend that more capital should be generated from the steel industry's own resources—of course the steel industry should make profits and plough back profits for its own capital development; that is the reason for the Question which I tabled today—at the same time it could sell off capital assets which are not directly concerned with what it is in business for, and it should be encouraged to take part in joint ventures with outsiders. I am very glad that this encouragement is being given by my right hon. Friend.
My right hon. Friend spoke about international activities, including the manufacture of pellets. I went to a flotation and briquette plant in Venezuela at the Sidor works some months ago, where pellets of 86 per cent. iron content are being manufactured for the steel industry in the United States of America. It is right that there should be a British investment in these activities.
I hold the view, which I have held throughout our debates on steel, that the British Steel Corporation is too large and too diffuse. I think it right that we should review the structure of the Corporation. Some activities could well be part of international activities, perhaps based on the United States of America, and this might even involve a whole product group; and other activities could be in a European context. All this, I understand, will now be part of the long-term review, and I look forward to hearing of the outcome of this review when it is made public this year or early next year.
There are many more observations which I would have liked to make in this debate, but there is not time. Undoubtedly the debate is taking place as a result of the decision to nationalise steel. Many of the issues which we are now discussing should not, in my view, be discussed in the House of Commons. In some cases the Government should act as referee, and there should be outside agencies for achieving this.
In the British Steel Corporation there is a new management learning how to run an industrial dynosaur. It is still learning, and the bankers—namely, the Treasury, which will have to provide the necessary—are right to investigate every activity and undertaking, because the Corporation is running on an unprofitable basis.
No private concern would bring 14 large companies together in one fell swoop as was done on the nationalisation of steel without expecting the most ghastly and complex——

Mr. Skeet: Mess.

Mr. Osborn: As my hon. Friend says, "mess". Today's difficulties are the inheritance of measures taken by the Labour Government when they decided to nationalise the industry. But my right

hon. Friend has given us a blueprint for the future of the industry, and I welcome the content of his early contribution to the debate, and beg to support his Amendment in the Lobby this evening.

6.10 p.m.

Mr. George Lawson: It is strange for a representative of the steel industry to welcome intervention by the Treasury. He is calling upon the Treasury and the bankers to scrutinise the plans of the British Steel Corporation, to decide what those plans should be and to approve or reject them. This is rather comical, coming from an hon. Gentleman opposite.
The line taken by hon. Gentlemen opposite is that the Labour Government caused it all and, had it not been for the threat of nationalisation, the steel industry would have been well ahead of that of any other country. Hon. Gentlemen forget that the steel industry of Britain was on its knees during the inter-war years, when there was no question of a threat of nationalisation. In many ways the war saved the steel industry. Long before the threat of nationalisation became a political proposition, the State was called in at the behest of the steel industry to protect it. Even after the steel industry had been nationalised, and denationalised, during the 13 years of Tory Government, there was no suggestion that the industry should be returned to a private enterprise form of control. There was a disguised restitution of private enterprise, but the industry functioned under many controls and protections. It is a long time since we have had a private enterprise steel industry.
When nationalisation is used as a reason for the state in which the British steel industry now finds itself, hon. Gentlemen should remember that this situation is not unique to that industry. It is characteristic of a large part of private enterprise. For example, the shipbuilding industry was one of the industries of which we were most proud. The term "Clyde built" was enough to warrant that a ship was one of the finest ships ever to sail the seas. That industry was not nationalised, yet the state it reached was such that a Minister could say to a Select Committee that the shipbuilding firms on the Clyde kept no proper accounts. They did not know what the ships they were tendering for would cost,


and they were in a state of hopeless muddle. This is characteristic of large areas of private enterprise.
The nationalisation of the steel industry was an attempted rescue. The industry has not yet been properly rescued, because the process of putting it on a sound competitive basis has been interrupted. We hear much about the deep-seated review which the Government are undertaking, and this is comical coming from hon. Gentlemen opposite. I can remember how they mocked at the National Plan propounded some years ago by Lord George Brown. They mocked at the idea of long-term planning, but here is long-term planning with a vengeance.
Every aspect of this great industry is to be looked at by civil servants, gentlemen from Whitehall. They will no doubt consult the industry, but the gentlemen from Whitehall will have the last word. The gentlemen from Whitehall will tell the steel industry what size it should be. When the industry produced plans for building up capacity by 1975 to 35 million tons, these plans were interrupted and halted. We are told that they have not been halted. I and other hon. Members have asked questions about the plans, for example, for 1971–72, and have been told repeatedly that Ravenscraig has not been halted.
The Secretary of State for Employment gave the House a categorical assurance that the Government were not holding up the Ravenscraig plan or any other plan, apart from Llanwern. The Government said that things must stop until we have a short-term review. Presumably, nothing was halted except Llanwern. Yet they cannot go ahead. I do not know what is being reviewed, unless it is an abstract amount of £185 million upwards beyond £200 million, and whether the country can afford to spend this amount of money on steel investment. I cannot make any sense out of this position. To my mind the Ravenscraig scheme was held up, and so were the others and the Steel Corporation has repeatedly said this.
The hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) spoke of the objections emanating from the shop floor in Sheffield about the decisions concerning special steel being taken elsewhere. My hon. Friend the Member for Rutherglen

(Mr. Gregor Mackenzie) and I could go to our constituencies and find men on the shop floor objecting to decisions on special steel which are being taken in Sheffield. They object to a section of the special steel industry, which they always assured us was—and still is—a very profitable section, being under threat of closure to benefit a section of the special steel industry in Sheffield. They put it to my hon. Friend the Member for Rutherglen and myself that if the special steel industry is making money there is no reason why it should be closed down to benefit some unit in Sheffield. I have a fair measure of sympathy for that.
We have to remember that only a relatively small part of the special steel industry has been nationalised. I looked at the position of that industry vis-à-vis overseas competition. According to figures in the Financial Times, in 1955 the United Kingdom was second highest among the seven principal producers of stainless steel in the free world. By 1969 we had dropped behind every one of those countries except Italy, which was rapidly moving ahead. Probably by now Italy is substantially ahead of us. When we measure this against what has happened elsewhere we cannot preen ourselves on how well we have been doing.
The Minister talked about decades and he was right to do so. There has been something characteristic about British industry, and not just the steel industry, for decades which has resulted in us falling behind. Those of us who backed the nationalisation of steel hoped that we might stop that and build the industry up. We listened a few weeks ago to Lord Melchett talking about the state of the industry when it was taken over. I am not betraying any confidences when I say that Lord Melchett said that not only had there been inadequate investment but there had also been inadequate maintenance.
Lord Melchett said that merely to replace the industry on the basis of existing capacity, which is now very small compared with its principal competitors, would cost something like £2,500 million. So much of the industry has dropped behind any ordinary measure of efficiency. When we consider this figure we begin to appreciate that unless substantial expenditure is undertaken rapidly we can forget any ideas that we will


become one of the principal industrial nations of the world.
This is the principal accusation which I level against the Government. They have interrupted a programme which has been worked out by those who know much more about steel-making and the possibilities of development than the genelemen from the Treasury. They have interrupted what many of us on this side of the House thought was a modest development programme which would build up capacity by 1975 to 34 million tons and then take it beyond. Look at what is happening elsewhere. Let us take the Common Market countries. In a recent publication from the European Community research and development organisation the modest annual rate of growth for the steel industry for the Six of 4·7 per cent. was given, rising, if things improved, to 6·2 per cent.
That substantially exceeds the level of growth that the Corporation has set for itself by 1975. The Corporation's aim is not over-ambitious. It gives us a chance of maintaining a position among the steel producers of the world but by no means the foremost position.
It was hoped that by taking certain measures the industry would become more efficient. The brownfield sites scheme was to utilise various sites, and there were relatively few, which gave the opportunity of speeding up the advantages accruing from the capital invested. This was one of the reasons for selecting Ravenscraig. It had a steel-rolling and finishing capacity about twice its steel-making capacity. The idea was to step up the making of steel so that the industry could utilise to the full its finishing capacity.
The Government have interfered and taken upon themselves the rôle of the judge and the rôle of the expert, who scrutinises and decides what has to be done. They must recognise that by itself the industry cannot find the means of developing the kind of capacity that we all agree it must have, irrespective of whether we agree about nationalisation. Without this level of efficiency we will not be one of the world's leading producers.
We need less interference from the Treasury and more backing. I am sure

that on this basis the industry will show that it has the capability to achieve 43 million tons by 1980. There is no question but that the men in charge of the industry know how to produce results speedily. This is being shown in the Scunthorpe area. Figures have been achieved at Lackenby which could be achieved elsewhere. On this basis the industry can become a thriving industry.
I want to deal now with Lanarkshire, where we have a contracting industry. A few years ago it represented about 20 per cent. of the steel-making capacity of the United Kingdom. That has steadily reduced to about 10 per cent. and it has been running at about 10 per cent. to 12 per cent. for some time. On the Scottish steel-making industry depends a large part of the remainder of Scottish industry, and if we are left with a fragment of a steel industry, with that industry unable to develop fully along with the rest, then there will be very strong feeling in Scotland.
Scotland has played a large part in the building of this nation. It has many great advantages—and I will not develop the theme of the deep-water ore terminal or the possibilities of the green field development area. There are rival claimants. We expect to see the developments earmarked for Scotland, notably Ravenscraig, to be carried through as promised. My understanding was that we were to have a statement before the end of this month. In any event, we expect to hear from the Government very soon that those schemes will go ahead.
The Government have taken upon themselves the rôle of judge, the rôle of the body which can say "Yea" or "Nay". Upon the Government will rest the onus if the nation is not able to get ahead speedily with solving the problems facing it, which are so well understood by those who are in charge of the steel industry.

Several Hon. Members: Several Hon. Members rose——

Mr. Speaker: Order. I make the comment, and I do not do so in a critical sense, that the hon. Member for Motherwell (Mr. Lawson) spoke for over 20 minutes. In the remaining 2½ hours, there are at least 10 hon. Members on the Opposition side and several on the Government side who wish to speak. I must ask for shorter speeches.

6.30 p.m.

Mr. David Lane: I have no direct constituency interest in steel. Cambridge wants more industry, but not a steel works. Nor have I to declare a personal interest in steel, in the normal parliamentary sense. However, I worked for the British Iron and Steel Federation in the late 1940s and throughout the 1950s, and no one who has had any connection with the steel industry can fail to have a permanent interest in its fortunes or to feel admiration and concern for those who work in it. I am very well aware of the anxieties in the steel communities and constituencies today.
As my right hon. Friend the Secretary of State said, we are concerned mainly with the present and the future. I regret that the hon. Member for Ebbw Vale (Mr. Michael Foot) persists so often in taking off from reality into extravagant flights of fancy and distortion, for I do not quarrel with some of what he says. However, before coming to the present and the future, we must take a glance at the past.
Right hon. and hon. Members opposite have a nerve when they accuse this Government of causing uncertainty. Since 1945, when the first nationalisation proposal came forward, hardly a year has passed without those in senior positions having to keep glancing over their shoulders at what was going on in the political arena. The Labour Party must be held primarily responsible for that distraction. It does not lie in the mouths of hon. Gentlemen opposite to accuse my right hon. and hon. Friends of causing uncertainty.
I hope that the House will endorse the Government decision to carry out these reviews. Any new Government taking over in the circumstances that my right hon. and hon. Friends found last summer were bound to undertake reviews of this kind. Intensely difficult problems face them. There is the relationship between Government and nationalised industry, which has not been solved in the postwar years by either major party. We want more commercial freedom, of course. But, so long as the Government have to provide most, if not all, of the capital, it is inconceivable that the Government can wash their hands of what

any industry is doing. We are still groping for the right relationship.
There are peculiar difficulties in steel. Production is sluggish because of world recessions. Customers are discontented, and, regardless of what the Government may do, the British Steel Corporation should take action to improve its customer relationships. The financial results are poor. The industry is losing money at the rate of about £1 million a week. Meanwhile, the technical revolution goes on, with which many hon. Members are far more familiar than I am——

Mr. Roy Hughes: Is not it a fact that the industry is losing £1 million a week because the hon. Gentleman's Government refused to allow the increase for which the Steel Corporation asked?

Mr. Lane: I do not accept that. The Government's decision has had some effect, but to nothing like the extent of the figures that we are discussing. For a number of reasons, the financial climate has turned bad for the industry in the last year or two. Instead of rushing to censure the Government, fair-minded observers should have sympathy with the inheritance that my right hon. and hon. Friends took over last summer and show more understanding of the real problems.
I have three brief pleas to make. The first is that the Government should carry out these reviews with maximum speed and urgency. I know from correspondence with Ministers, especially with my hon. Friend the Minister for Trade and Industry, that the Government are aware of the problem of morale at the present time. A number of my friends and former colleagues in the industry, who have never advocated nationalisation, are worried by the continuing uncertainty. They have had nationalisation; they had the reorganisation two years ago into product groups; now there is the possibility of more. We all want to see a secure basis for the future as soon as possible.
Secondly, the Government should make a firm declaration, and my right hon. Friend virtually did so today, that British steel will stay in the front rank among the world's steel producers. We should


not aim to be 100 per cent. self-supporting in steel. We never have been. Equally it would be a mistake to rely to any substantial extent on imports. We know that the industry, for a variety of reasons, is suffering from overmanning and under-investment. These matters have to be put right. Total capacity must be expanded further. Even more important, the percentage of modern plant has to be increased greatly in the next few years. We have a fine tradition of skill and pride in the industry. We have the foundation for the future, and the best of our plant is as good as any in the world. On this foundation, we can hold our own, to the benefit of the British economy and not least the balance of payments, if a major investment programme can be sustained for many years ahead. We want to concentrate on a few very large integrated plants in Scotland, the North-East Coast. Immingham—Scunthorpe and South Wales. The pattern is already developing. My right hon. Friend spoke about a new greenfield plant, and there has been talk of the Thames Estuary. I hope that that will be considered by the Government. We shall also need cold-metal plants at suitable sites inland. Above all, let us have growth and optimism and not decline and doubt.
My third plea concerns the structure and ownership of the industry. I am sure that my right hon. and hon. Friends keep in mind what we said in our election manifesto. The Government are already busily carrying out their election pledges, as the House recognises. In our Manifesto we said:
We will progressively reduce the involvement of the State in the nationalised industries, for example in the steel industry, so as to improve their competitiveness. An increasing use of private capital will help to reduce the burden on the taxpayer, get better investment decisions, and ensure more effective use of total resources.
I am sure that my right hon. Friend was right in the decision he announced a month ago that the main stream of bulk steel making should stay in one total organisation within the present British Steel Corporation structure. To carry out that election pledge, the most urgent need is to restore the main stream of steel making to profitability at the

earliest date; then it will be increasingly attractive for private capital to come into the industry, to bring the extra disciplines of private capital, to reduce the strain on the Exchequer, which at present has to find the whole of the new money required, and, not least, because this is the germ of an eventual solution that we all want, to remove the industry from politics once and for all.
There has been talk of a B.P. solution. I hope that something on those lines can be worked out. It may not be precisely parallel to the structure in B.P., but I hope the Government can evolve some system where, progressively, more private capital is injected into the main stream of bulk steel-making, which must first be restored to profitability.
My view about hiving off is that this should not be a case of major surgery. It is more one of rearrangements on a fairly modest scale. Anybody connected with the industry knows that it is impossible to draw tidy boundaries around it. That was one of the main reasons against the Labour Party's original nationalisation. There are, of course different sectors of the industry, including tools, special steels and the rest, which cut across the dividing lines between manufacturing and fabricating. Sometimes on one site there is a wide spread of functions and sometimes there is total integration. I hope that we shall see some rationalisation and tidying up of the boundaries between the public and private sectors, but the first objective must be to keep the mainstream of steelmaking profitable.
I hope that in the central organisation, as it develops, there will be a slimming-down of what many people regard as an undue increase in the non-productive, administrative and overhead sides of the industry. If there is to be rationalisation among those engaged in operations, as there surely must be throughout the iron and steel making sectors, this must be matched by similar rationalisation on the non-productive side of the industry.
The Government are being unfairly criticised where they should be supported. I hope that within a few months major decisions will be taken so that the industry is set on a new course towards an expanding and profitable future, with an increasing rôle for private capital. Above


all, I hope there will soon be reassurance about the future for the men and women who are devoting their talents and efforts to the industry and whose livelihoods and those of their families are at stake.

6.42 p.m.

Mr. Barry Jones: I understand your request for brevity, Mr. Speaker, but I should like to take up quite briefly what was said by the hon. Member for Cambridge (Mr. Lane). He raised the matter of possible green field sites. It rather seems that he had a pin hovering over the map of Britain, but he did not seem to indicate any likelihood of such a site going to North Wales. Since I represent a large steel making constituency in North East Wales, I am sure the hon. Gentleman will forgive me if I mention—I shall not go into the matter in detail, since none of us wishes to conduct an auction about green field sites—that the Shotton works in Wales are adjacent to the M6 spur, have access to a deep water port and are part of an area which is brilliantly administered by the Flintshire County Council. The works are also adjacent to the steel-hungry Midlands. I will not pursue that point, although one could make a good case for locating a green field site on the banks of the River Dee, possibly on reclaimed land.

Mr. Roy Hughes: Would my hon. Friend also bear in mind that there are green fields in South Wales as well.

Mr. Jones: I am well aware of that, and there are also green valleys, too. I have come here not to bury the British Steel Corporation but to praise it. I believe that the Chairman heads an impressive conglomerate. I feel that the Corporation has often been somewhat unfairly criticised. It has a quarter of a million employees, it is the seventh largest corporation outside the United States, and it has direct exports of some £200 million a year, and its contribution to the industrial scene of Britain is second to none. Yet at this stage it is, to use a boxing term, reeling like Cassius Clay in the fifteenth round. The denial of £100 million in investment grants in future might be termed as something of a vicious kidney punch and, as an additional bit of eye-gouging, it has to suffer from the relaxation of the scrap import controls.
I should like to make one point about stockholdings. Everybody wants to see the Corporation a little more "in the black" and a little less "in the red". I believe that an examination of the steel stockholding would indicate a possible line of action that the Government might take. I recollect that the stockholding business in steeel has waxed fat since vesting day and the Continental producers are considering whether they might take over one or two of these steel stockists in the United Kingdom. The Government might consider allowing the Corporation to have a little of the steel stockists' gravy. I believe that the figures of the steel stockholders' turnover amount to some £300 million a year. There is surely food for thought in that sphere.
There is gathering gloom and apprehension in my constituency about the steel industry. The sooner that decisions are taken the better and the sooner they are made known the better. I would instance what has happened about the future of the Shotton steel works in my constituency. We assumed that, with luck, we would get a green field site development. We assumed that, if we were unlucky, we might end up with a heavy site being closed down and with rolled steel being taken from Scotland and South Wales where there are other green fields. We consider that it might be possible, if the Government do not go ahead with a green field site, that Shotton might have new electric furnaces and have therefore the right to exist in the generation that is ahead. It is already being said by the younger people that there is no future in the steel works at Shotton, and that it is likely to be run down. It is time to pose the question whether there will be an announcement soon as to the future of the steel works there.
It would be proper in such a debate as this to indicate the qualities of the steelmaker himself. He tends to be overlooked. I would not say that steel men in East Flintshire are very different from steel men in South Wales or Scotland, but they have a very special quality. It is a quality of human warmth and comradeship and brotherhood in the making of steel. Perhaps it is to do with the heat and warmth of the metal on which the men work. It is therefore extremely disappointing that the Corporation, and ultimately the steel workers, have had to


suffer the uncertainty and climate of doubt which has bedevilled the situation. Therefore, I hope that in the very near future, many of these doubts and fears may be put at rest.

6.48 p.m.

Mr. Patrick McNair-Wilson: When I made my maiden speech in 1964 I chose the subject of the steel industry, which I had then recently left. At that time the then Labour Government, which had recently assumed office, were making extravagant pleas that, with the British steel industry in the hands of the State under nationalisation many of its problems would disappear. However, here we are some years later taking part in this debate having heard from the hon. Member for Ebbw Vale (Mr. Michael Foot) in his opening speech that he feels that the Government are interfering too much. The simple fact is that there is no simple answer to the problems of the British steel industry. There is no particular magic about private enterprise, nor about public ownership. This industry used to be described by the Labour Party as a commanding height, but now those people who work in the industry must realise how vulnerable is the fortress which they are defending. It is this industry above others which is so subject to the vicissitudes of life.
Therefore, the Motion before the House is utterly wrong in that it talks of a persistent uncertainty over the last year. This uncertainty has lasted not only for 20 years but for almost as long as anybody in the House can remember. The reasons are simple. We are as an industry all the time facing changes in the economic climate. In addition, there are various other challenges which the industry has to face, not least of which is the increasing supply of steel from countries other than the major steel producers of the past. One of these countries is Japan. We see from the figures that in 1955 steel production in Japan reached a figure of 9½ million tons, whereas in 1970 that figure went up to 98 million tons. That is an upward trend of something like 12½ million tons every year in the recent past.
On the other hand, looking at United Kingdom capacity, whereas this year we have a planned capacity of about 26

million to 27 million tons, a figure which has not altered considerably over the last 15 years, and in 1975 we are planning for a figure of approximately 33 million to 35 million tons, depending presumably on the outcome of my right hon. Friend's survey, we can see that Japan has swept forward as a great major steel producer.
Why? Japanese home demand for steel has gone up by 15 per cent. a year whereas our home demand for steel has gone up by little over 3·5 per cent. Our steel industry is dependent almost entirely on the performance of the economy as a whole. It is always a very good yardstick for any economy to see how the British steel industry is doing in relation to our economy. It is impossible to lay at the feet of any individual Government the reasons, and I do not intend to do so, but I make the point that the British steel industry is a victim, not a cause, of the situation with which it is faced.
The British steel industry has had to face three major challenges since the war: technological, economic and political.
Technologically, the situation facing the British steel industry—indeed, perhaps all steel industries—was when in the late 1940s the first major oxygen converters were tried out in Austria. When they became the relevant modern way of making cheap bulk steel the open-hearth furnaces in Britain were out-of-date overnight. There are still 15 major works in Britain, of which Irlam is one, with old open-hearth furnaces. If those works are to be brought up to date they will have to be completely refitted or there will have to be a new rationalisation.
We had the oxygen converters coming in in bulk in the late 1940s the electric arc furnaces, and so on; but technologically at the end of the war the industry faced big challenges. Because there was so much investment already in old open-hearth plants it was not economic or perhaps even politically right to make a major change.

Mr. Eddie Griffiths: Many of the open-hearth plants are obsolete, but does the right hon. Gentleman agree that many are unfortunately in the wrong geographical places to cash in on large B.O.S. plants?

Mr. McNair-Wilson: The hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths) has completely taken my


point. I can think of many plants in the position which he has described.
We have had other developments which are well known to hon. Members, like continuous casting and perhaps even direct reduction, which I have a feeling may be coming along ultimately. It may be that with pelletised ores this will happen.
Then there is the economic challenge of the desire for new large investment At the moment we have one 3 million ton plant at Port Talbot, one 2½ million to 3 million ton plant at Appleby-Froding-ham-Redbourn, and five 1½ million to 2 million ton plants at Ravenscraig, Lackenby, Shotton, Llanwern, and Steel Peach and Tozer. The last represents the biggest thing we have in steel making. When we set that against the developing pattern in Japan, Russia and the United States, we see how far down the ladder we are.
It is now becoming clear that the kind of figure at which we should be aiming is a plant of approximately 10 million tons. That is an enormous plant. We have not got anything even a third that size. That will cost approximately £1,000 million to construct. One can immediately set that in the context of the figures of investment about which we were talking earlier. For instance, by 1980 Japan will have the N.K.K. plant at Fukuyama producing 16 to 20 million tons, and Italsider at Taranto will be producing 9 million to 10 million tons, and we are already into the 1970's. If we desire to go for this big plant we must make sure that it will be fully utilised.
One problem is that at Llanwern and Ravenscraig this has not been the case. This point was brought forward by the hon. Member for Motherwell (Mr. Lawson). The siting of those two plants, even though done by a; Conservative Government, was a judgment of Solomon—it pleased nobody and provided no answer. This was, with hindsight, a wrong decision. So we have the problem of size and the cost of the investment.
We then have to look at where these sites should be. Hon. Gentlemen opposite would like sites in their constituencies. I can understand that. However, we have to think of the deep-water terminals where we can bring in the big ore carriers

if we are to get the economy of size. The hon. Member for Cleveland (Mr. Tinn) made a plea for the deep water terminal in his constituency. This is a matter which I am sure my right hon. Friend will be locking at.
In the economic challenge we must consider prices. I do not wish to go into this matter in detail, but I am not sure that we are right to control prices if it means passing on any increased cost or losses to the taxpayer. If we truly want the industry to be an economic unit, then we must allow it to charge the right price for its product. Last year we had the ridiculous situation of rationing structural steels because our price was too low, and this year we are closing plants. Therefore, we must have the price level which truly reflects the cost of the product we are making.
The third challenge is that of politics. The British Steel Corporation is unlike all the other big units in the world in that those big agglomerations came into being because of commercial need. The British Steel Corporation came into being because of political expediency. The two do not make happy bedfellows. To get the best commercial entity or commercial unit, political expediency is unlikely to provide the best answer.
My hon. Friend the Member for Cambridge (Mr. Lane) pointed to the time when he was in the British Steel Federation and the attempts which have been made since the war to nationalise the industry. In every case they have created the uncertainty to which my hon. Friend referred. I believe that the British Steel Corporation will have a more difficult task than almost any other steel industry in the world merely to overcome this political problem which was created when it was brought into being.
Rationalisation is never easy or pleasant. It often means a restructuring of the labour force. The hon. Member for Ebbw Vale pointed to the lesson of the coal industry. We have to be very careful. There is a bright future for the coal industry, but we may have realised that too late. I hope that we shall not do that with the British steel industry. There is a real place for this industry. It is bound to feature in political discussion. For the sake of those earning


their livelihoods in it, I hope the Goverment will not make it a plaything of politics.

6.58 p.m.

Mr. David Watkins: I listened with great interest to the hon. Member for the New Forest (Mr. Patrick McNair-Wilson). I hope that he will forgive me if I do not follow too closely along the well informed line of argument which he has developed although in my speech I may touch on some of the points he made.
I thought that the speech of the Secretary of State was notable for its omissions rather than its commissions. The right hon. Gentleman is a member of a Government whose negotiations to take this country into the European Economic Community are at an advanced stage. He introduced from the Government benches a major debate in the House on the steel industry, which will be vitally affected one way or another by the success or failure f our application. Yet, in his speech, there was not one word about the steel industry in relation to our application to join the Common Market.
When we consider the position, the omission is the key to much of the Government's action which has caused so much uncertainty in the industry over recent months. In spite of the noises being made in some quarters, and no less in spite of the noises not being made in some quarters, the fact remains that the size of the British steel industry is one of the major problems of this country's application to enter the E.E.C. The Common Market Commission has repeatedly shown that it is wary of allowing a steel company, or group of companies, to produce more than about 12 per cent. or 13 per cent. of the total steel output of the Community, because it reckons that any company, or group of companies, which produces more than that distorts the pattern of competition which is written into the principles not only of the Treaty of Rome, but of the Treaty of Paris which brought the European Coal and Steel Community into existence long before the Treaty of Rome came into being. The British Steel Corporation currently produces about 18 per

cent. of what would be the total steel production of an enlarged Community should this country's application, and that of the associated countries, prove successful.
I am aware that on 5th May one of those mysterious, anonymous spokesmen announced from Brussels that it was not expected that the size of the British steel industry would be any problem in regard to this country's application to join the Common Market, although there would be concern about certain of the marketing methods of the British Steel Corporation. I shall come back to say something further about the anonymous spokesman. I want, now, to touch upon some of those marketing practices, because they would complicate this country's entry into the Common Market.
One of the complicating factors is the dominating position of the Corporation in the British market. Another is the Minister's powers, which can be exercised, over the industry. A third is the very existence of the Iron and Steel Consumers' Council because, in terms of the Common Market ideology, the Iron and Steel Consumers' Council detracts from the independence of the industry in determining its own marketing and other policies and puts intervention in the industry into the hands of a body established by the Government themselves.
Those factors being present, it is perhaps not surprising that the right hon. Gentleman was so silent because, when the Government made their intervention in the pricing policy of the Corporation, they used the Consumers' Council in their manoeuvres to cut down the applied for increase by half. By doing that the Government have made the economic operation of the Corporation impossible. They have put the Corporation in the position of subsidising the consumers of its products, many of whom are not subjected to the same degree of control over price increases, by which they are more than able to make and cover the additional cost to them of increased steel prices. Above all, by their interference, the Government have seriously under mined the Corporation's ability to assist in the financing over the next decade of the necessary capital investment for the growth, expansion and modernisation of the industry.
One of the supreme ironies of the use of the Consumers' Council by the Government in the price structure of the industry is that this has been done by the Government who are committed to entry into the E.E.C., yet they could not have done that had we already been in the Common Market. I think that we are entitled to ask whether this interference by the Government, who are supposedly dedicated to non-interference in industry, together with the hiving-off threats, about which we continue to hear so much, was a backstairs move to break up the Corporation and thus facilitate the acceptance of the British Steel industry by the Common Market Commission. Having listened to some of the speeches of hon. Gentlemen opposite, my suspicions are not allayed, but increased.

Mr. Skeet: Is the hon. Gentleman correct? Italy has interfered with the price of steel, and also with the price of oil. I should have thought that it was compatible with the Treaty of Rome to interfere with prices.

Mr. Watkins: The industry in Italy is not in the dominant position that the Corporation is in the market in this country, and that is one factor which explains the difference. I noticed that the hon. Gentleman nodded when I referred to the ideology of the Common Market, so I presume that he would not disagree with my analysis of the situation.

Mr. David Crouch: Is the hon. Gentleman saying that from his side of the House there is no suggestion, and would be none, of Government oversight of vast increases in prices? Does he not remember the Prices and Incomes Board which was set up by the Labour Government to do just that? Is he saying that it is not the Labour Party's policy to oversee prices?

Mr. Watkins: I am saying nothing of the sort. The Prices and Incomes Board was established to carry out a thorough investigation into prices in a completely independent manner, but it was wound up by the Conservative Government, who have therefore done away with that kind of machinery.

Mr. Eddie Griffiths: Would not my hon. Friend agree that the Prices and Incomes Board dealt with applications,

without fear or favour, from both the private and the public sector, whereas the Government's policy is fear for the public sector, and favour for the private one?

Mr. Watkins: I agree with my hon. Friend, who has succinctly and accurately summed up the Government's approach to this matter.
I said earlier that I would return to the question of the anonymous spokesman who, on 5th May, said that the size of the British Steel Corporation presented no difficulty in regard to this country's entry into the Common Market. Viewed against the background which I have outlined, and bearing in mind the principles embodied in the Treaty of Paris and in the Treaty of Rome, I find it difficult casually to brush aside, in the almost offhand manner of that spokesman, the problems confronting our steel industry. This is not a debate on the Common Market, but the Common Market is casting long shadows over the British Steel Corporation, and I am bound to say that the Government have been less than frank with the House on its effects upon the steel industry.
My position, and that of many of my hon. Friends who represent steel constituencies, is that we represent divisions in which the steel industry plays an enormously important rôle, not only in the economy of our constituencies, but in the economies of considerable areas around our constituencies, and affects many industries. The Consett Steel Works in my constituency employs between 6,500 and 7,000 people. The very existence of those works is vital to the economy of a large area of North-East England.
When the industry was nationalised, the old Iron and Steel Federation produced the Benson Report, to which the Secretary of State referred in rather more than glowing terms. That report was produced as a so-called alternative to nationalisation. It envisaged the phasing out and closing down of the Consett Steel Works, with all the effects that that would have had, not only upon the constituency, but upon a large area round about. There is no doubt that the steel works were saved by being taken into public ownership, and today, five years later, we have there one of the most modern and viable steel plants in Europe. The hon. Member


for the New Forest spoke about investment, and I take up the point made by him because, notwithstanding the modern and vital nature of that plant in my constituency it still needs, not uncertainty, but further investment. If the Government have any plans to break up the steel industry in pursuit of entry of the Common Market or any other doctrinaire objective, they will face the implacable opposition not only of my constituents but of all my right hon. and hon. Friends.

7.10 p.m.

Mr. Churchill: It is strange to hear hon. Members opposite complaining of too much Government interest and involvement in steel when their party made this a Government responsibility by nationalising it. I wholeheartedly support the review of the industry which the Government are undertaking, so that this vital and basic industry can be rationalised, modernised and—I am sure hon. Members on all sides would agree—substantially expanded to meet strong overseas competition.
The hon. Member for Consett (Mr. David Watkins) said that the Common Market was casting a long shadow over the future of the British Steel Corporation. I cannot accept this, because to be part of a free trade area with a home market of 270 million people, as the enlarged Community will be, will give efficient steel production in this country colossal opportunities.
The hon. Member for Ebbw Vale (Mr. Michael Foot) attacked the Government for cutting the steel price increase in half. I cannot follow him in that, because Trafford Park in my constituency—where 40,000 people go to work every day—has a great preponderance of heavy engineering and heavy industry, and steel is a basic primary material. The 14 per cent. increase on top of several swingeing increases in the price of steel that have taken place since nationalisation would have very seriously affected the overseas competitiveness of many of the products there and have made the employment situation even worse.
My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) mentioned the burden of nationalisation on steel in Sheffield. Lancashire Steel would not be in its present situation, and 4,500 people would not be facing redun-

dancies, but for nationalisation. Lancashire Steel would have had to continue its steel making plant as well as the wire works, but the B.S.C. has no interest in continuing steel production at Irlam. This is why B.S.C. is throwing 4,500 people out of work.

Mr. Eddie Griffiths: The hon. Gentleman cannot categorically say that there would be steel making at Irlam today but for nationalisation. My guess, which is more informed on steel than his, is that Irlam would have been closed before now.

Mr. Churchill: I cannot accept that. An independent company like Lancashire Steel would not have wished to depend on other plants or the Japanese while it could still profitably produce steel at Irlam. This could still be done, if the open-hearth furnaces were replaced, with a fairly modest investment programme.
I must declare an interest, because 750 of my constituents in Stretford and Urmston are among the 4,500 threatened in the Irlam closure. About 1,900 are threatened with redundancy this year, although no final details have been announced. This uncertainty is causing a good deal of anxiety among my constituents. There is at least the prospect of a bid by private enterprise which not only would continue the re-rolling at Irlam and the wire making at Warrington but would not wish to be dependent on the monopolistic control of the B.S.C. for its supplies, and so would carry on an independent steel-making capacity. This would go far to mitigate the 4,500 threatened redundancies.
But there is a difficulty which I hope the Government will recognise, in that this interest which has been expressed from private quarters has met a very frosty response from the Steel Corporation, which, one can understand, has, as a monopoly, no interest in seeing anyone set up business in competition with it. I understand that it has been unwilling to supply the figures of production and profitability which any responsible bidder would need to enable him to bid for the whole of the works.
I believe that the Government will accept that they have a certain wider interest in this matter than the Steel Corporation itself, since the Irlam Steel


Works is such a major local employer. It provides about 60 per cent. of the employment of the people of the village of Irlam and extends fairly wide into mine and neighbouring constituencies. What do the Government intend to do about this? It has been suggested that the B.S.C., through its associate, John Finlan Limited, will set up new industries in Trafford Park and Irlam and this will mitigate the effects of some of the redundancies. But this will inevitably take two, three or even four years to establish: it is no good to men being thrown out of work this year.
I am grateful that the Government have said that they will look with renewed favour on the area when granting industrial development certificates, but this is not enough. The Irlam Action Committee, which includes the local unions, the local authority and other interested bodies, has made it clear that it does not care who carries on steel making in Irlam, provided the jobs are saved.
Will the Government lean on the Corporation and tell it to supply figures on which a private enterprise bid could be based? If such a bid is then forthcoming and is realistic, I hope that the Government, in order to safeguard the jobs of so many hundreds of men and their families, will require the Corporation to give up the two relatively small—in terms of employment—but highly profitable parts, the bar mill at Irlam and the wire works at Warrington, which the Steel Corporation wishes to retain.
On the wider question of the future development of the steel industry we have had many suggestions for the siting of plants, and, naturally, every hon. Member is rooting for his constituency. There seems to be an assumption that a coastal site is the only way of producing steel economically. There has been a great deal of talk about this, but there seems to have been little investigation of the cost of an inland site in what are the traditional heavy industrial areas of the country. If we are to close down inland steel-making plants—and Irlam is but one of several in the greater Manchester area—and opt for coastal sites, we must consider the effect of this on the established industrial centres where heavy engineering and other heavy industries have in the past been close to their steel.
In the long term many of these industries would undoubtedly wish to be near their primary raw material, and this could disastrously accelerate the decline of traditional industrial areas. I ask my hon. Friend to consider the possibility of a deep-water ore terminal off Liverpool which could take the largest of the present day ore carriers and perhaps a pelletising plant as well, on site, and the practicability of transport by heavy duty railway or a modern system of barge-trains up the Manchester Ship Canal to an inland site. That site need not necessarily be Irlam—it probably is not big enough—but it could be somewhere in the greater Manchester area.
I would like to put some figures in my right hon. Friend's mind when considering this, British enterprise is heavily involved at the other end of steel production; namely, getting the ore out of Australia One British company has built a 180-mile railway from Mount Tom Price in North-West Australia to Port Headland. The ore is transported in 100-ton railway trucks, 180 at a time making a total of 18,000 tons per train. The cost of this is one third of an old penny per ton mile.

Mr. Skeet: Would my hon. Friend not agree that instead of having the pelletising plant on Merseyside, it would be much cheaper to build the pelletising plant in Australia?

Mr. Churchill: There are already such plants in Australia, but we do not want to be totally dependent on our good friends there when we are facing such competition for their materials from the Japanese. If we are to be free to choose our source of raw material from Africa, Latin-America and other places, it might be convenient, and a source of employment, to have a pelletising plant in this country. Now that we have a supply of North Sea gas, the problems involved with an inland site are greatly reduced. I would ask my right hon. Friend to give serious consideration to the implications for the future development of heavy industry in this country which would result from a commitment to coastal sites alone.

7.23 p.m.

Mr. Peter Hardy: I can understand the hon. Member for Stretford (Mr. Churchill) making reference to the need for a consideration of


inland sites but I cannot understand hon. Members opposite who refer to our disapproval of the Secretary of State's review. If the Secretary of State had decided last autumn that there should be a balanced review of the steel industry and its problems perhaps we should have been suspicious rather than critical. There would probably have been grounds for suspicion. I am sure that many people in my constituency and in the steel industry share the view that the Secretary of State is engaged not so much upon a balanced appraisal of the steel industry as a panic reaction to the very sharp downturn in trade which occurred not long ago.
I will not follow what was said by the hon. Member for Stretford any further, because I was rather touched by a comment made by the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn), who I regret to say is not here now. He said that he regretted that this debate was taking place at all. Sheffield, Hallam is quite close to my constituency and I do not regret that this debate is taking place. It is right when there is profound anxiety in our constituencies, when there is growing unemployment, that this House should hold debates on relevant subjects. Having heard the hon. Member for Hallam express such regret, I feel that the majority which he secured over me at the 1966 General Election ought to have been even more greatly reduced than it was.
The Secretary of State said that he wanted to see the steel industry put back to the top of the world league. I have been scratching my head trying to find out when we were top of the world league. We were certainly not top of that league in the last 10 years before the steel industry was renationalised. In the last 10 or 12 years when the industry was in private hands Britain's share of world steel markets dropped by one-third, from 12 per cent. to 8 per cent. If we are to reach the top of the world league we certainly cannot afford to talk about, think about, or play with ideas of hiving-off.
I prefer the comment of the Secretary of State in the debate on 18th March when he gave a pretty fair analysis of the problems facing British Steel Corporation's management at the time of

re-nationalisation. He said that the industry was not planned and integrated, that it was developed from a series of disparate decisions, later aggregated, and that the chief task of the British Steel Corporation was to create order out of that disparity. It had to integrate and prepare the industry for a sound future.
It has obviously done a great deal in these directions, apart from establishing a good pattern of labour relations which I regard as extremely proper in view of the responsible and serious nature of the industry's labour force. It also engaged in a considerable appraisal of new industrial investment. This is the greatest need, because if we are to get high in the league table we must have investment. When we began to experience the short-term pressures of a slight recession in industry at the beginning of the year the Government's reaction was to panic and to apply political tactics because, faster than the downturn, came the leap of the hiving-off gang who have done a great deal to create the anxiety which is one of the most serious problems in our society.
Obviously the question of the pricing condition and costing of British steel was serious, but the Government's reaction was fundamentally wrong because not only did they stop investment at a time of inflation, which seems to be undesirable, but they brought to the steel industry a great anxiety. In the long term this can have dangerous consequences. I can understand the Government wishing to control prices, attempting to seek popularity. This is understandable in view of their fractured vows of last year. If price restraint was part of the general policy I could understand and to some extent support it. Unfortunately, this is a very lonely restraint; it is more a case of shifting the burden to the public sector than giving assistance to the consumer.
If the Government were serious about restricting prices in these ways perhaps we would have seen the West Riding County Council, which introduced a record rate increase, being told to collect only half of that increase in respect of the British Steel Corporation's hereditaments in my constituency. That did not happen. The Corporation often has to shop in the same market as everyone


else. The increases which it proposed would not have made the industry any less competitive. They seem to have been very realistic.
The price of steel plate, for example, rose by 10½ per cent. to £69·55 per ton. The Government murmured words about maintaining competitive capacity when this price increase was announced. Yet the price of steel plate in West Germany is £86·35 per ton. The price of steel plate in France is £84·30 per ton—or it was when the British Steel Corporation announced the recent price increase. If the right hon. Gentleman had allowed the Corporation to charge the higher price that it wished, the Corporation would not have been in the same difficulty today and British industry would still have enjoyed a very competitive position in respect of the products of our steel industry which it has to purchase.
Perhaps the Government failed to see that if they want the British steel industry to pay for or contribute towards its own investment, then it must charge a reasonable price. The Government may have been reluctant to see us breathe down the necks of our continental competitors who charge a higher price, or they may have been prepared to see the British Steel Corporation struggle while the private sector enjoyed steel products at a lower price than that which their competitors in Europe have to pay. It may be that some hon. Members will say that I have selected the example of plate steel deliberately and that it is an isolated example. There may be steel products which are not so competitive. But every one that I have seen is reasonably competitive, at least with the steel products of other countries. For example, the price of our cold-reduced coil, which I understand is used considerably in the motor car industry, is £73·50 per ton. In West Germany, at the time our price increase was announced, the price was £73·30, in France it was £75·70, and in the United States it was £88·50.
I do not know about the American situation but I am told that the price of European cold-reduced coil has been increased or is about to be increased, so our steel of that particular kind remains competitive, as does another very important product, re-rolled billets, where the price of the United Kingdom product

is £47·10 and for the West German product it is £49·90—and this is likely to increase.
Some months ago the Secretary of State and his colleagues may have been delighted at the idea of restricting increases in the price of steel to assist private industry, especially the motor car industry. That may not have been the act of a very efficient business man, but it would have been a reasonable assumption of the Government two or three months ago. Attitudes have changed since then. Indeed, we want now to be offensive to the motor industry and not to help it. Perhaps that is because the industry has not been quite as co-operative as the right hon. Gentleman would have liked. It has given very high wage increases and has enjoyed cheap steel. Its workers receive high wage increases whilst the workers of the British Steel Corporation have to put up with very much lower wages. We are subsidising the private sector at a very unjust cost placed upon the steel workers and the public sector generally.
All this would not have been so bad if we had been able to get on with the investments we need. We have to accept that if we are to get anywhere in the world's league tables we have to increase investment considerably to enable the Steel Corporation to reach the target of 40 million tons plus by the end of the decade. This can be done only by massive investment. Conservative Members of Parliament and their supporters may shudder at the size of the investment programme, but if this so basic industry is to get anywhere this programme has to go ahead. If it is to go ahead, we have to accept that there will be a reduction in the labour force of one-fifth as a result of new plants, and if we want the steel areas to co-operate in that reduction we ought not to lay upon them the burden of the severe anxiety which they are experiencing today.
In my area we fully understand what this means, because a great deal of change in the industry has already taken place. Our people know that it means that a very large number of jobs will be lost and many people will be affected by change. More people will change jobs than will become redundant. They are accustomed and prepared for this. The management and unions in my area are


capable of handling the problem. But it becomes more difficult if there is the present uncertainty.
Our local newspapers have always taken a properly independent line in politics and they are a very good barometer at present. Week after week we are now finding reports and comments which are extremely alarming. Only this week the Rotherham Advertiser, in a special leader on the front page, pleaded with the Government and with the British Steel Corporation to end the uncertainty which was casting a considerable blight on the lives of thousands of men, women and children in South Yorkshire.
This uncertainty is extremely harmful. It is dangerous because it will destroy the good relationships and the responsible attitude which the steel industry has enjoyed in my area throughout modern history. This is an example of the Government behaving in a clumsy and panic-ridden way. I plead with the Government to take a more cautious and wholesome line and, perhaps, less panic-ridden, by allowing the investment we need. If the Government do this our people will be prepared to accept the redundancies and the contraction because then they will see the new developments which South Yorkshire needs.

7.37 p.m.

Mr. Ronald Bray: In deference to your wish, Mr. Speaker, I shall be brief in my intervention.
Earlier my right hon. Friend the Secretary of State for Trade and Industry refreshed the House's memory on the Government's policy for the steel industry. We learnt again that the bulk producing plants will remain within the central public sector and that the other units, which were smaller, and, perhaps, the processing units, would be considered for purchase by private investment.
I welcome this action because it will release funds which would otherwise have to be provided from the Treasury for development of the central and larger bulk producing steel plants. My right hon. Friend the Secretary of State also said that relationships with the Corporation were essentially good. I should like to know whether my right hon. Friend will receive full co-operation from the Corporation regarding the disposal of

certain of its redundant plants where sale to private industry or, alternatively, scrapping is to be considered. I have in mind the position where there may be ample capacity, let us say, on the East of England for a certain product within the scope of the Corporation but where in the West we shall have an older and perhaps less efficient plant which has been making an identical product over the years. Will there not be extremely serious resistance to the older plant being offered to a third party? I envisage that occurring. The Corporation will logically pre-empt for that plant to be demolished rather than offered on the open market.
My hon. Friend the Member for Stretford (Mr. Churchill) cited the case of Irlam, a typical case in point. Does the Steel Corporation propose to offer its plants openly and equitably, or will it hold back any plants which may, under private enterprise, prove to be strongly competitive?
Looking into the question of private capital further, I think that the source of capital is irrelevant. It may be foreign investment. The hon. Member for Ebbw Vale (Mr. Michael Foot) said that foreign investment would not be attracted to the steel industry. The more capital we can attract from private investment the less the strain on central Government finance. For that reason, I commend an international stake, provided that it is an acceptable one, in the British steel industry.
Next, redundancies. I have had a good deal of experience with the steel industry. I go a long way with the remarks made by the hon. Member for Cleveland (Mr. Tinn) about the steelworker being loyal, hard-working, and very keen on the product of his industry. I regret to see such people getting an unfair deal. Although it is said that the Corporation has projected an investment of £7 million on industrial estates, I am not satisfied that that is anywhere sufficient. Only 4,000 new jobs are projected or are in the pipeline. I ask the Minister to give this matter his most serious attention, bearing in mind the needs of certain inland areas.
The pattern as laid down by the Government will relate the pressure on capital and make the industry appreciably more discerning in the matter of customers' needs, rather than allowing the customer to take the "nth" place down


the line as appears to be the case at present with the motor industry. I understand that when the motor industry is in full production it will be almost essential for it to purchase some of its deep drawing steel for pressings and the like from overseas, possibly from Japan, a country which itself is now feeling the pressure on its capital resources for the steel industry and whose steel industry is not working at full capacity.
When the vote is taken later I ask that all support be given to the Government's long-term programme for the industry.

7.43 p.m.

Mr. Eddie Griffiths: In our last debate on the steel industry those in whose constituencies redundancies were occurring sought to catch your eye, Mr. Speaker, and those who succeeded got their points home. I hope that I shall not mention Sheffield more than twice in my speech tonight.
I am sorry that the hon. Member for Stretford (Mr. Churchill) is not in his place. The hon. Gentleman popped in, made his Irlam speech, and popped out again. That is a tribute to the hon. Gentleman's deep interest in our great steel industry. The great problem facing the Government and the Corporation alike is the pattern for the future. We are all in favour of rationalisation until we have to be rationalised. Then we start kicking over the traces and making representations here, there and everywhere. I have noticed an increasing interest in Irlam in terms of looking towards private enterprise for salvation. I personally do not believe that such salvation is at hand.
On Second Reading of the Iron and Steel Bill in 1969 the right hon. Member for Leeds, North-East (Sir K. Joseph) said this:
What a bitter paradox it is that, but for nationalisation, many of the changes necessary in British steel would already have occurred spontaneously. I will tell hon. Members how they would have occurred. Some of the private companies would have flourished, some would have faltered and some might have gone REPORT. 8th May, 1969; Vol. 783, c. 698.] enterprise system should work."—[OFFICIAL REPORT, 8th May, 1969; Vol. 783, C. 698.]
Anyone looking to private enterprise for salvation would do well to study those words.
I want to consider the industry's past, its present, and its future and put some

questions to the Minister in an effort to get some further clarification of statements made by the Secretary of State today and previously. One of the stories of the industry's past can be summarised quickly by these words—too little investment, too little capacity, in particular capacity at the wrong time, and badly balanced plants.
Today we have heard of the outstanding examples of Llanwern and Ravenscraig where, because of political intervention, the Government of the day decided to split the two plants. The plants are separated by a considerable distance, each with small melting capacity and a large finishing capacity. This was a great financial liability for the Corporation when the plants were taken over. My hon. Friend the Member for Motherwell (Mr. Lawson) said that capital investment was required at Ravenscraig to bring the melting capacity up to match the finishing capacity. This in essence is what will happen at Llanwern, which the Secretary of State for Wales announced and not the Secretary of State for Trade and Industry.
One of the few political points I want to make is that on nationalisation we made a big mistake. I believe that the compensation was far too generous, because, to put it crudely, we took over quite a few clapped-out plants. The Corporation's invidious job has been to examine these plants and to recognise that they would have to be closed once the boom was over.
Nationalisation brought 14 companies together. That was a major job. There have been two reorganisations starting with regional organisations. This was superseded by the product division. One of the problems that has plagued the Corporation in the two years from the back end of 1968 to the back end of 1970 was that although there were boom conditions in Britain—a great demand for steel products at home and a great demand internationally for steel products—we did not have the working capacity to meet the demand. We had to go round the world shopping for steel ingots and slabs. In the Rotherham area the embarrassing situation was that although the order books were full production had to be reduced because not enough scrap could be found to keep the electric arc furnace going.
During this period the Corporation has been plagued by the price problem. I do not often criticise my own Government, but on this point I lay strong criticism at the feet of my Government. When the Corporation said, "We want a price increase. Trade is good. Our prices are too low. We can get the price we are asking for", the Government sat on the request for months. The Corporation got too little too late. It has been estimated that, in the two years to October, 1970, the Corporation, it it had had the price rises it wanted at the time when it asked for them, could have earned another £200 million, which would not have brought it into the red as it is now.
I come now to the present state of affairs. When the Government came into power, we were told by the propagandists that they were a Government prepared to meet the challenge in every facet of industrial, commercial and social life, and that their plans were ready. They have been in power now for nearly a year, and all we have had, in effect, apart from the past week or so, have been vague indications of their intentions for the industry.
I feel most upset at the events of the past eight weeks. The right hon. Gentleman has admitted, both at a private meeting and in the House today, that the British Steel Corporation was more or less put in the hands of the Government's receiver in the sense that, every time it wanted to spend money, every time it wanted to develop, make capital investments or raise prices, it had to come cap in hand to the Government. I find this very disturbing, especially in the light of the attitude of right hon. and hon. Members opposite when they were in opposition. I quote from the Third Reading debate on the Iron and Steel Bill in 1969, just under two years ago:
I strongly approve of their desire to become fully commercial. But, sadly, as hon. Members opposite so often reminded us, the Act of nationalisation is passed and steel has fallen victim to Socialist dogma. Having Ministers and their civil servants constantly breathing down the back of their necks must be infuriating and time-consuming for the Corporation's managers".—[OFFICIAL REPORT, 11th July, 1969; Vol. 786, c. 1737.]
Those words were not mine, though I should accuse the present Government of doing precisely that now. They came from the hon. Gentleman the Member

for Bournemouth, West (Sir J. Eden), who sits alongside the Secretary of State and. I assume, advises him on steel matters.
There were many other hon. Members—I could easily quote another four now—who, when in opposition, criticised the then Labour Government for interfering in a nationalised industry. The present Secretary of State and his Department have not stopped at interfering. In setting up the steering committee, a committee to look into the affairs of the Corporation, they have gone much further. Let us consider the people on the steering committee who are carrying out the short-term review. I am told that there is someone from the Ministry, there is Lord Melchett from the Corporation, someone from the Treasury, and a consultant. May we be told a little more about the consultant? I should be interested to know his or her background. Does he come, perhaps, from Guest, Keen and Nettlefold—or would that be to make too much of a political point? I should be interested to know who the consultant is and what part he is playing in the recommendations to the Secretary of State.
The Corporation moves into this year facing a potential loss of about £50 million because commercial freedom has been taken from it. It is not allowed to charge the prices which it feels commercially it could get away with in the industry. It has no other means of raising money. I should like to hear the right hon. Gentleman develop a little further how he proposes to get the Corporation out of the read in the coming year.
Now, the problem of closures. Unfortunately, because of Government policy generally in the country and the stagnating economy, the redundancies are occurring at a time when we have about 800,000 unemployed and job opportunities are very slim. The redundancies are occurring in areas where there is unemployment of 4 per cent. to 5 per cent. already, and the chances of these workers finding another job are fairly remote.
Looking to the future, I hope that the right hon. Gentleman will state clearly that he will give back to the Corporation the authority which, I believe, the Act of nationalisation vested in it. As I understand it, a nationalised industry is


subject to Ministerial control applied directly by the Minister and not by a steering committee appointed by him, and it is also accountable to Parliament. We are witnessing a new departure now from the two established principles. The idea seems to be, "If you get a bit in the red, or if we want to sort you out, we shall set a steering committee on you, scrutinise you from top to bottom, and see exactly where you are going and what you are doing". I hope, therefore, that we shall hear this evening that the Corporation is to be given back its freedom.
When will the Corporation have the right to make its own commercial judgments on prices, on the size of the industry as it sees it, and on the development of markets? Although the right hon. Gentleman suggested that the question of the size of the industry came in his long-term review, I suggest that it should be seen as the responsibility of the Corporation, not of the Government of the day.
If the right hon. Gentleman and his Government are not prepared to give the Corporation commercial freedom, they must accept the alternative, namely, that they are responsible for the capital investment required to put the industry in a competitive stance.
I come now to two or three questions on the Secretary of State's statements both today and a month back. He said that the integrated bulk steel-making plants would remain in public hands. Where those integrated units have sophisticated processes at the end of their plants, will those processes remain part of the set-up and remain in public hands?
Semond, does the right hon. Gentleman envisage bringing private capital into bulk steel making, either on its own or in partnership with the Corporation? Also, when he refers to consideration of a green field site, does he intend that this would be part of the Corporation's plans or that any plan which the Corporation had would be in competition with investment which might come from the private sector in this connection?
When the right hon. Gentleman says that bulk steel making is to remain in public hands, does he mean for all time, or does he mean that at any given time, assuming that there is a Conservative

Government, that Government can be free to bring in private capital if and when they can attract such moneys?
Now, the question of special steels and other sections of the industry. Am I to understand from what we learned from the right hon. Gentleman at a private meeting which he had with several of us from this side that he does not envisage it as part of Government policy that a "For Sale" notice will go up on every plant in the special steels division, the tubes division, the engineering division and the chemicals division? Does he, rather, see that the Chairman of the Corporation will be invited to have discussions with the private sector, or a potential buyer, and that if the commercial deal is satisfactory and to the advantage of the Corporation—on the basis of a willing seller and a willing buyer—he will be quite happy if they have discussions?
Will the right hon. Gentleman also look at the position of Brown Bayley's? This firm appears to be rather a rogue elephant. We have the public sector owned by the Corporation and the private sector held by private shareholders. But we also have the firm of Brown Bayley's in Sheffield which was taken over by the Industrial Reorganisation Corporation. After the demise of the I.R.C. the Government took its shares over and now own a substantial part of the firm. Right hon. Members have been talking about duplication in management at the top. The obvious and logical thing for the Government to do is to pass Brown Bayley's into the Corporation, and not duplicate senior and higher management.
A number of my hon. Friends have mentioned the position of steel workers. I was a steel worker for 16 happy years. One of the reasons why I came to the House was that I thought that I could serve the steel industry better as a politician than as an industrial chemist. I am probably as much in contact with steel workers as any hon. Member. I feel that the morale generally is low, because of uncertainty about the future and about the Government's attitude, because the Government have not made clear what the future size of the industry is to be. The workers feel that there is little security in the industry. Many of


the private firms used to build up the aura of a family concern. I believe that the Corporation has built up that feeling within the Corporation in a short time.
I was at a dinner some time ago when the general secretary of the main union, the union to which I belong, the Iron and Steel Trades Confederation, told Lord Melchett, who was the guest of honour, that he would not have to look over his shoulder at what was happening behind him, that the steel workers within the Corporation were right behind Lord Melchett in the stand he has taken over the Corporation's position. I believe that that stand will succeed in the end. I was present at an executive meeting of the Confederation, which passed a unanimous resolution, covering steel workers throughout the industry, that any move to hive off profitable bits of the industry will be fought with all the determination and strength within the power of that organisation. Its power is not wielded recklessly. It has a reputation second to none for industrial relations. But when the livelihood of steel workers and their families is threatened, when the future is made insecure through the political meanderings of a Conservative Government who have lost the confidence of the country, I believe that it will fight and fight to the end.

Mr. Deputy Speaker (Miss Harvie Anderson): I must remind the House that long speeches inevitably mean that some hon. Members will be cut out of the debate.

8.4 p.m.

Mr. Hamish Gray: I, unlike the hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths) do not have a direct constituency interest in steel. But much has been said this afternoon about green fields and deep water, and I would point out that in my constituency, in the north of Scotland, I have more and bigger green fields and deeper water than anything mentioned today.
It is important that the steel industry should be made aware that many hon. Members do not have a direct constituency relationship with the industry but are extremely anxious about the industry, and look forward to the day when it will

prosper as we all believe it should. I realise that it has a vital rôle to play in the economic future of this country and that there is need for expansion of the resources within the industry and for improved performance at many levels within it.
I welcome the review, because we are talking about big money, big investment. It would be unwise for any Government to contemplate investment of such magnitude without making absolutely certain that the basis on which that investment was to be placed was sound. I welcome the fact that my right hon. Friend has seen fit to carry out such an expensive and exhaustive review. I am also glad that we have an opportunity to debate this subject before any statement is made in the House, because I am sure that this afternoon some misplaced beliefs will be put right. I hope that when my hon. Friend the Minister winds up he will be able to allay the fears expressed in certain quarters.
The amount of investment which takes place in the steel industry over the next 10 years will be absolutely vital. If we are to remain in the world market, money must be ploughed into the industry. Many people believe that if we are to remain in the steel business at all considerable investment is essential. We have taken a decision, and it has been announced that the bulk iron and steel work will still be carried out within the B.S.C. Now that we have taken that decision it is even more important that we show good will and willingness to invest at a very early stage. Japan invested more in the one year 1969 in her steel industry than we in this country did in the five preceding years, and both Germany and France outstripped us in investment over a similar period. Therefore, we must look seriously at our future policy. Admittedly, between 1964 and 1967 the threat of nationalisation was hanging over the industry, and this could well have deprived it of certain potential investment.
If we look at our investment expenditure related to our crude steel production, we see that the performance is even more disturbing. Our ratio was lower than that of any of our 12 leading competitors over the same period. This trend must be changed.
Private investment in steel would naturally be welcomed. In return for investment, whether Government or private, the whole industry must take a long hard look at itself and at its structure. I believe that there are portions of the industry which could be hived off—and here I disagree with the hon. Member for Sheffield, Brightside—without any great realignment being necessary within the industry generally. But I caution the Government not to fall into the trap that the Labour Party so often fell into when it was in Government, that of being doctrinaire. There is nothing doctrinaire about any of the moves we have made so far, and there is certainly nothing doctrinaire about the review which my right hon. Friend has decided to have carried out. But we must be careful not to be tempted to hive off if to do so could lead to disruption of planned growth within the industry.
The Government must accept that investment in the industry should be of a long-term nature. There will be no quick appreciation of capital investment, nor will sufficient capital be obtained from hiving off subsidiaries. That can help, but vast capital will be necessary if we are to develop the industry so that it is world competitive. If hiving off of any of the subsidiaries must take place, it should take place fairly quickly because the people working in the industry will want to know where they stand. For too long the industry has virtually been a ping-pong ball in a match between nationalisationists and liberationists, and a period of stability is now essential.
Certain situations occurred when the Labour Party was in power. For instance, in 1968–69 a reduction of 12,000 job opportunities was announced. It is therefore hypocritical of the Opposition to suggest that the Government are unnecessarily creating unemployment by bringing about the rationalisation which has to take place. In January, 1970, the Corporation announced an expected loss of 40,000 jobs by 1975. A similar situation has arisen in other industries, and it has taken a considerable time to rectify.
The industry must consider whether its management structure is an effective as it could be. It must analyse the work being done and those who are doing it. It must make absolutely sure that, unlike

many other nationalised industries, it has not created within itself an unnecessary layer of semi-management staff.
Recently a friend of mine closely connected with the industry visited an American tube mill. His appointment was made with the vice-president of the company at starting time in the morning. When he arrived he was accompanied by the vice-president who was in a boiler suit; he was close to the men working for him, and his relationship with them was excellent. I am not suggesting that relationships in our steel industry are not good, but, as in a great many other industries, management must take a close look at itself as well as those employed by it.
The unions can help. They have a proud record of co-operation in this industry. This should continue, because only by co-operation can the necessary increase in production be achieved which will help to make the whole project competitive. The unions can no longer stand aloof from the problems facing management. There is a genuine will in the industry to co-operate, and this must be given every encouragement.
The steel industry is virtually fighting for survival. The livelihood of many depends on it—for example, the small sub-contractors supplying the industry, who perhaps are not large enough to diversify in the event of the orders from the Corporation diminishing. These people must be taken into consideration, and a planned system of ordering in the Corporation must be encouraged.
I need say very little about the steel industry in Scotland because it has very good spokesmen in the House with constituency interests. However, I sincerely hope that the Government will look very closely at Scotland's claims for any future steel development. The facilities, labour and reputation are there, and I hope that the investment will be forthcoming.
My contribution to the debate has necessarily been brief. However, I hope that my observations will be carefully considered by the Government, together with those of many other interested parties.

8.15 p.m.

Mr. Alex Eadie: The trend of this debate has confirmed the


suspicion which I had when I took a deputation to meet the Secretary of State not long ago. Parliament is based on debate, and what concerns me is the little influence that we shall have in determining the policy which is followed. The right hon. Gentleman said that his steering committee of civil servants is examining the industry. We shall have very little influence on policy because there is no Minister on the committee. That is regrettable, particularly when we remember that the Conservative Party, when elected, said that we would have open government and that the Government would consult the people. Yet the right hon. Gentleman has confessed today that a bunch of civil servants will predetermine the industry's future and that Parliament's say will be of little significance.
I was more than concerned when the Minister told us that in the second phase of the steering committee, which would consider the long-term investment of the industry and project the industry's rôle, the question of coking coal would be discussed. I hope that the right hon. Gentleman will not be advised by the same civil servants who advised the Labour Government on the fuel policy which should be pursued in relation to the demand for coal and coking coal. It is well known that the 1967 White Paper dealing with the future demand for coal, including coking coal, is looked upon as a farce in mining and energy circles. I hope that the Minister will be forthcoming and will tell us the people who will project the future of coking coal and demand in the steel industry.
My hon. Friend the Member for Motherwell (Mr. Lawson) has mentioned the question of Ravenscraig at Question Time and in debate in the House. The Secretary of State confessed that he had interfered in the workings of the British Steel Corporation in relation to Ravenscraig. Because of this, there has been delay. Therefore, the Minister must be specific and tell us why, in logic, he confesses that he has interfered with the Corporation in relation to its capital expenditure and then says that the Corporation is responsible for the delay concerning Ravenscraig.
The question of Ravenscraig is of great moment to Scotland. There are 25,000

steel workers in Scotland, and the unemployment rate there is a scandal—over 120,000. We have the highest unemployment rate among young people under the age of 18 in Great Britain. We therefore need not be surprised that the steel workers in Scotland are wondering what the Government are playing at because of the uncertainty that their policy has created.
We are entitled to ask what is the Government's steel policy? Is there delay in relation to the steering committee because of the Common Market, for example? Are the Common Market negotiations tangled up with the hesitancy in allowing the Corporation to determine the industry's future? It might have surprised hon. Members when they read last weekend that when the Government first went into the negotiations it was said that there would be a transitional period of one year in relation to the European Coal and Steel Community.
I endeavoured by questions to the right hon. Gentleman who is carrying out the negotiations to find out why one year was decided for the transitional period in relation to the iron and steel industry. He was not able to tell me. I asked him: whom did he consult? Then we read in the papers only last weekend that the Government have decided in the negotiations that there will not be any transitional period. Do the Government wonder that the steel workers are anxious? They are anxious because of the uncertainty with which they are faced.
What is governing Government policy? Do they try to influence policy in relation to the capital investment which will be required to be spent on the steel industry? Are they looking at a situation where it will be easier and cheaper for us, once we are in the E.E.C., to import steel, rather than remain the major steel-producing country that we are at present? It is right that the right hon. Gentleman should be asked and that he should answer these questions because they are being asked by steel workers all over the country, and he has a responsibility to come clean on the issue of the Common Market and on why the Government decided to abandon the transitional period.
At the outset of my remarks I talked about Parliamentary accountability and about people and organisations being


able to influence the policy of the Government and their steering committees. We are entitled to be told, for example, what the Government's view is of a submission which has been made by a body well known in Scotland—the right hon. Gentleman is aware of it—the Scottish Council (Development and Industry).
The Council made a submission to the Government on the British steel industry and its future in Scotland. In that submission, it gave a devastating analysis of British steel production, and it looked to the future. It showed annual totals of actual investment expenditure in steel since the mid 'sixties, and it included figures from Germany, Belgium, France, Italy and Japan, comparing them with those of the United Kingdom. In every item in that table we were well below in the league. There was an analysis of investment expenditure related to crude steel production, and figures were given from Belgium, the Netherlands, Italy, Austria, Spain, Sweden, Canada, Japan, the United States, Germany, France. Again, we were at the bottom of the league.
In that submission, and arising from those facts, the council said:
One may conclude that unless this situation is changed in the years immediately ahead it will become increasingly difficult for the British industry to compete profitably with the new plants being constructed by overseas competitors.
In the cross fire of the debate nationalisation has been used as an alibi for the problems of the steel industry, and some hon. Gentlemen opposite like to say that all the troubles and all the ills which at present confront the British Steel Corporation and the steel industry are because of nationalisation. I want to quote someone very authoritative in the steel industry, Mr. Arthur Bell, a divisional officer in Scotland of the Iron and Steel Trades Confederation.
Mr. Bell gave an effective answer to the allegations about nationalisation. He said of the present situation, and the future, that it is
A time that could see the demise of steel making in Scotland within this decade. Not because the Scottish steel workers are strike happy, not because the Scottish steel worker has not the initiative, skill and ability to make steel or roll it into its various products, be it rods, billets or sections, as has his counterpart throughout the world, not because, as

some people critically point out, that this is the result of nationalisation, or that, as some people in high places would have us believe, the Scottish steel worker is too highly paid and that his wage demands are pricing us out of the market. No. We must look somewhere else, and, just as in many other industries, the steel industry is reaping the reward of the lack of foresight by those who owned the industry for more than fifty years and who failed to invest enough of the economic wealth created by the steel worker.
Returning to the submission by the Scottish Council, the Minister ought in this debate to reply to that part of the submission about Hunterston and the new steel complex, because in this submission the council argues that case, giving effective figures, and the people of Scotland are entitled to know what the Government's long-term policy now is.
I finish on this note. I was critical of my right hon. Friends when, in Government, they set up the big Ministry of Technology. I had great doubts whether such a big Ministry would be able to work efficiently, considering all the responsibilities it had. When the present Administration formed the Department of Trade and Industry I expressed anxiety again, because it has such wide-ranging responsibilities, and I felt that the issues of steel, of energy, of trade would be buried within that Department and that it would be administratively difficult for that Department to carry out these vast responsibilities, I do not want to be unkind to the Secretary of State, but I think it has got to be said: I believe that, because of the massive size of this Department, due time and attention are not given to the wide-ranging responsibilities which the Department has. I think the responsibilities are so numerous and great as to make the Department accident prone. Some of us on this side of the House who have had responsibilities in industry itself have sometimes had to tell workers that they were accident prone and to advise them to look for some other posts than those in which they were accident prone. I would say that the way the Department of Trade and Industry is handling the steel situation shows that the Department is inclined to be accident prone. A change is required in the administration so that the steel workers and the energy workers and trade can all get the kind of treatment to which they are entitled from the Mother of Parliaments.

8.27 p.m.

Mr. John Spence: At the risk of being caught in the cross fire of argument, I must refer to the opening speech of the hon. Member for Ebbw Vale (Mr. Michael Foot). Whilst no one could accuse him of being a shrinking violet or one who lives by the rule that an able man shows his spirit by gentle words, he showed, in spite of some muddled thinking, the direction in which the industry may be pointing and the direction in which he, like ourselves, would wish to see the industry point in the next few years. He said that he would like us to look at the future of the industry over the next 10 years, and I hope I shall be able to do so in a few brief remarks.
I was gratified that my right hon. Friend outlined the form of the study of the future of the steel industry, but I was surprised and somewhat dismayed that the nature and extent of the strategy over the next decade was not given in more precise terms. I propose to address myself to the other factors which my right hon. Friend should take into account when looking at the future structure and development of the steel industry, and which would be to the benefit both of the study and of the industry which we wish to serve.
For generations the steel industry has produced the universal material for our industrial advance. It has been one of the great engines of economic progress and development. By its very nature steel is a multi-purpose material, and rarely is steel the ideal material for the job for which it is used. This has been highlighted by the great developments in metals technology. The explosive expansion of world steel capacity has hidden from view the fact that steel has been overtaken by other materials in a great number of a specialist uses.
We all know that steel oil drums have been the monopoly of the steel industry ever since they were first invented, but now an alternative material, plastic impregnated paper, is used for oil drums. Another homely example is pre-stressed concrete, which has an ever-widening use. Even more important is glass-fibre and concrete used as a composite material, thereby considerably reducing the use of steel in the construction industry.
In the past 25 years steel, unfortunately, has become closer to being a marginal industry, and there is every appearance now that it has been overtaken in much the same way as the great foundation industries of the past—cotton, coal and the railways—have been overtaken by technical, scientific and technological advance. Steel has become marginal for two reasons.
The first reason is the challenge of the new materials industries to which I have referred. These involve not just a substitute material for steel but a completely new concept. There is a shift in concept from what industry provides to what man wants to accomplish, a shift from a general purpose compromise material to a specific product material. Man decides what he wants, and what he wants the material to perform, and the scientists and technologists duly produce this material. Although this is happening in other directions, the greatest economic impact of this shift is on the modern steel industry.
The second reason why steel has become marginal is that modern science has made steel a compromise material. Steel comes under pressure when a new material is developed which has the physical capacity to perform in excess of the compromise material. This is happening with great rapidity. No examination of the structure of the industry, no future investment and development policy, will be either responsible or worth considering if it ignores the challenged and changed position and prospects for steel as a commodity, when it is under pressure from new materials. It is irrelevant whether the responsibility for this lies with this Government or the previous one: any uncertainty in the steel industry over the next 10 years lies with neither Government but with the metallurgists, molecular scientists and chemists, with the men who have developed and are developing new specific purpose materials.
This is not to say that steel cannot have a new lease of life. Over the next 10 years, there might be an increase as well as a diminution in demand. But unless we are prepared to adopt new manufacturing processes it is doubtful whether we can make the industry as valuable as we should like, even in the short term. Even if we adopted the most advanced techniques we could not put steel back


into its former position, or enable it to win back all its markets. But if we adopted the most modern production processes, we could arrest the decline.
The present uncertainty to which the Motion refers cannot be placed, as an economic and technical fact, at the door of my right hon. Friend. He should take as long as necessary on his deep study of the new materials and fit steel into a materials policy. That will be in the best interests of the nation and the industry and all who work in it. I hope and trust that the House will vote against the Motion.

8.40 p.m.

Mr. Roy Hughes: I do not intend to follow the hon. Member for Sheffield, Heeley (Mr. Spence) into the realms of the marginality of steel as a product. Almost every speaker has agreed that the steel industry is a vitally important and basic one and, what is more, that it is a fair indicator of the health of the economy, though perhaps a better one is unemployment. There are approximately 800,000 unemployed at the moment, and the steel industry is not in a healthy state.
In the part of the world from which I come, these two factors are very much related. It is fair to say that, if it were not for the present relative boom in the mining industry, the employment situation in Wales would be catastrophic. As it happens, the steel industry employs some 80,000 people in the Principality, and this almost doubles the number employed in the mining industry. More than a quarter of the Steel Corporation's productive capacity is based in Wales, and much secondary employment is generated from it. Therefore the crisis in steel is the biggest threat to the employment and prosperity of people in Wales. Thousands of jobs are at risk.
I was interested to read an article in The Economist of 13th March which questioned the wisdom of a British steel industry at all. It argued in favour of importing great quantities of steel. However, in turn, that would mean that we were no longer masters of our fate. We have seen how we have been held up to ransom over oil in recent months. A similar situation could arise over steel. In that event, of course, what would have

to be taken into consideration is the effect on the balance of payments. It would do tremendous damage to our economy, and I can hardly believe that such a proposal could be seriously discussed at high level.
To return to the immediate situation, we have the Steel Corporation's announcement of 20th April that 7,000 people were to be made redundant, and that there were to be a further 12,000 redundancies, bearing in mind that this might include a portion of the 7,000. However, from the point of view of Wales, it is inevitable that thousands of jobs will be lost. At present, morale in the Welsh steel industry is very low. The same applies to the country as a whole. Many workers are looking over their shoulders wondering whether it might be their turn next, especially when they see the sort of headlines that have appeared recently in the Western Mail. That on 20th April read:
Britain's 814,000 jobless worst for 31 years.
The heading of the editorial was in similar terms:
Heading towards a million unemployed.
That is the state to which this Government have brought our country in the matter of about 11 months. For South Wales, it is a case of being back to square one. But this is expected of a Conservative Government. The Conservative Party has always been associated with unemployment.
Industry and commerce rely essentially on confidence in order to function. What chance has the British Steel Corporation had? Immediately this Government came to power, there were rumours about hiving off special steels, the construction sections and the chemical and engineering sections. This uneasiness has gone on for 11 months, and the morale of the industry is very low.
It is true that we had better news in the announcement by the Secretary of State on 27th April that bulk steel making was to remain in the hands of the Corporation. However, this still leaves in balance the other sections to which I have referred. I have felt for some time that the Government are pursuing a vendetta against the British Steel Corporation because they resent public


ownership and wish to sell off its profitable sections.
This is in line with the philosophy of the hon. Member for Bournemouth, West (Sir J. Eden), who will be winding up this debate. He believes that public enterprise should be allowed to do only what private enterprise cannot reasonably be expected to do. In other words, he wishes to leave the profitable part of the industry to the private concerns and to leave the loss-makers with the publicly-owned concerns. I would ask the hon. Gentleman to look at the Steel News of 22nd April, which pointed out:
Critics of the Corporation's pricing policy need to bear in mind that in the last year of private ownership, the steel companies comprising the B.S.C. would have made an aggregate loss of £56 million on the Corporation's present accounting basis.
Then there is all the hullabaloo about prices. It must be remembered that until a few months ago the steel industry had had three years of relative boom. It is fair to say that the Labour Government deliberately held back price increases. Had the industry been allowed to put up prices, its financial resources could have been built up. The Economist on 13th March said, in defence of Lord Melchett:
… if he had been allowed to charge more during the steel boom of the past three years the B.S.C. could have netted a £200 million profit instead of heading for a deficit".
Those are the real facts of the situation. We know that the application for a 14 per cent. increase has been reduced to 7 per cent. That application was necessary to pay for raw materials and to balance the books of the Corporation.
The Government show no consistency whatever in their attitude to price increases. I presume that most hon. Members drive motor cars, and we all know how many increases have taken place in the price of petrol in recent months. Are the Government saying that only private enterprise will be allowed to act commercially? If the B.S.C. prices are allowed to rise by the 14 per cent. which is asked for, then car makers and shipbuilders will still be paying lower prices than almost every other country in Europe. It is obviously beyond doubt that the B.S.C. needs capital for future investment. This is absolutely essential. During many years of private control

of the industry investment was allowed to slip back.
I should like to end by being a little parochial and making a constituency point. One hundred yards or so outside the boundaries of my constituency is the great Spencer works which employs about 8,000 people. Although it is outside the town, it is the pivot of the economy of Newport. The announcement by the Secretary of State on 18th March postponing the large investment there of the £50 million cast a gloom over the whole area. This was alleviated later by a statement from the Secretary of State for Wales in the Welsh Grand Committee which said that the development, after all, would be allowed to go ahead. This is a logical extension of this great works and it should never have been held up. The original announcement created harm and despondency in the steel industry.
There are three other medium-sized firms, employing approximately 6,000 people, in my constituency. There have been redundancies, admittedly small, in two of those firms. One could speculate that this is the tip of the iceberg, but it adds to the already heavy unemployment in South Wales.
It is becoming clear that this is the first Government since the war to use unemployment as an instrument of economic policy. Mr. Peter Jay, the economics editor of The Times, on 20th April, said:
A high level and a rising trend of unemployment are, it is emerging, an integral part of the Government's short-term economic plan rather than just a regretted side effect of past output trends.
In addition to unemployment we have inflation. What do the Government do about it? They look for a scapegoat. The scapegoat they have found on this occasion is the trade union movement. It could be said that if there were no trade union movement, the Government would have to invent one.
Our economic life in post-war years might be called the Keynesian era. He taught that the level of employment was decided by the level of demand. Therefore, it could be argued that the claims of the trade unions are stimulating the economy and that, if it were not for these wage claims, the situation could be much worse.
There is certainly a great need to restore confidence in the economy and a start could be made in the steel industry. On 20th May the Times Business Supplement carried an article headed,
Fair Play for the British Steel Corporation.
This can best be done by the Government allowing the 14 per cent. increase for which the Corporation is asking. The Government should also state categorically that there is to be no hiving-off of the industry, and they should allow the investment programme to proceed. I should be surprised if the Government decided to do that. They seem intent on wrecking this great industry. All that they disagree about is the way that it should be done.
On 22nd April my local paper, the South Wales Argus, pointed out:
Having helped to promote conditions in which the present steel industry cannot be viable, the Government will no doubt make great capital—literally and figuratively—of the need to de-nationalise, which means creaming-off the profitable bits to private ownership: surely the shabbiest bit of political trickery of modern times.
I wholeheartedly agree with those sentiments.

8.54 p.m.

Mr. David Crouch: The hon. Member for Newport (Mr. Roy Hughes) should not use such phrases as "the Government are trying to wreck the steel industry". He knows that that is not true. It is misleading and extremely foolish to make such an observation. I have great respect for the hon. Gentleman's sincerity and knowledge of his constituency and the industry, but that kind of misguided phrase does not help the debate.
The debate has produced good contributions from both sides; it has produced much better contributions than the last debate, when there was a higher generation of emotion, led, perhaps, by the hon. Member for Ebbw Vale (Mr. Michael Foot). However, I understand his emotion in the matter. I, too, have some emotion.
Concerning rising prices in, and the state of, the steel industry, last year the British Steel Corporation faced a situation of almost catastrophic dimensions. Rising costs of over £200 million hit it like an avalanche. For that reason it

wanted to make massive increases in its prices. The Government were right to pause and say that they must consider the whole future of the industry against the background of our national problem and the economy of the world, particularly the economic and industrial problems facing the steel industry throughout the world today.
I feel that for too long steel has been political. We must get down to seeing it again as an industrial and commercial problem. We have to learn to live with this nationalised industry and, in order to return the necessary measure of confidence to the industry, the country and the economy generally, my right hon. Friend the Secretary of State has made it clear in the House that it is his intention not to weaken the industry but rather to strengthen it to enable it to go forward in the short term, in the middle term, and in the long term, and it is in the consideration of going forward that I wish to address the House tonight.
I ask the House to consider the problem of the run-down of the industry, and the run-down of the number of men employed. What seems to me strange is that this should have come as such a surprise to the House, to the public, to the industry, to the towns, and to the works in the towns where this rationalisation is taking place.
We have been accustomed to the rationalisation of our major industries since the war. We have seen the rationalisation and run-down, in order to' improve efficiency, of the coal industry, where about 30,000 men a year have found work in other industries after being retrained. Somehow we have been able to cope with a run-down in the coal industry of 30,000 men a year, sometimes rising to as much as 51,000 a year. That was too much. We are now talking of the run-down of manpower in the steel industry from 255,000 to 195,000, a total of 60,000 men, which is equal to two years of rationalisation in the coal industry. All I am saying is that it is strange that this should have come as such a surprise both to the Opposition and to the Government.
I ask my right hon. Friend for an assurance that enough concern has been shown about the problem by all the Departments concerned—the Department of


Employment, the Department of the Environment and, of course, his own Department—and that plans have been prepared for the retraining and redeployment that will be necessary to cope with this sizeable problem. We are talking about redeployment in the steel industry, and I do not wish, in this House, to minimise the seriousness of what redeployment means to anyone faced with such a problem. Nor do I wish ever to appear detached from the severity and anxiety of such a situation. I should therefore like an assurance from the Government that they are satisfied that the energies, expenditure and activities of the Departments that I have mentioned are capable of coping with this problem in the towns that will be hit by such rationalisation.

Mr. Eddie Griffiths: I understand the hon. Gentleman's concern. In a normal employment situation the point that he is making would be valid, but what can the Government do when there are 800,000 unemployed, and areas such as Rotherham and Irlam already have high unemployment figures?

Mr. Crouch: I accept that there is nothing so difficult as rationalising an industry in an attempt to modernise it and enable it to match the competition that it has to face when rationalisation means putting men out of work temporarily while they are redeployed and retrained. This is a testing time for the Government, but they cannot afford to duck it and say that we should put off modernising such an important industry as this one. A return of confidence in this industry is vital—not only among management and men but in the country at large—a confidence that the industry is on the way forward again as the backbone of our industrial economy. We must give the whole country the clear message that we see a future for the industry.
Suggestions have been bandied about tonight that perhaps this industry is not so great, that it may suffer from competition and imports. It must be seen as still the backbone of our industrial expansion. I do not accept the view that we shall be blown about by the winds of competition and may even have to give in and receive steel from abroad.

We should look ahead and show that we have a real plan for the development of the industry to cope with the future competition which we are beginning to hear more about all the time.
Part of the present Heritage Plan of the Corporation is to modernise and rationalise the industry up to 1980, to replace obsolete equipment. It is not a big expansion plan but a modern expansion plan. Will this Heritage plan be effective in meeting competition at the end of the '70's? How effective will the industry be?
What new structure is planned for the industry to enable us to compete with the Japanese? My hon. Friend the Member for the New Forest (Mr. Patrick McNair-Wilson) spoke interestingly but frighteningly about the future plans, present investment and actual production in Japan at its fully integrated coastal site. If we look ahead, it must be with confidence that we are not only modernising what we have but preparing for tomorrow and that kind of competition as well.
My hon. Friend said that the investment for such integrated sites might be as much as £3,000 million. These are very big figures which one can easily throw across the Chamber. Has the Minister such figures in his mind for the next 10 or 20 years? If so, how will he finance it? I believe that he can find this money, but I want him to be sure that there is a future for such investment and that he can find such finance. It may seem strange for a Conservative to say this, but the finance may have to come first from the Government.
This is a nationalised industry, and we have to make it successful. Let us see it run properly and effectively. I hope that there will not be too much interference. I was glad of my right hon. Friend's assurance that he did not intend to look over the shoulder of the Corporation too much. In this way he will give great encouragement to the restoration of confidence in management and men from top to bottom.
A first priority must be to produce in the next 10 years a modernised, viable and competitive industry. This is not an unprofitable industry. Let us think of investment with a view to producing a profitable industry, which is a laudable


aim for any Government looking at a nationalised industry. This is how we should look to the British Steel Corporation of the future. We on this side of the House have a tradition for sometimes fighting shy of the nationalised industries. We must not fight shy of this industry; we must restore confidence in its future. If we do, we may well find that private investment will come into it willingly.

9.6 p.m.

Mr. John Smith: I congratulate my hon. and right hon. Friends upon bringing forward this timely Motion demonstrating their deep concern over the future of this basic industry. I have a direct interest in the steel industry because of the situation within my constituency of the Gartcosh strip mill which is an integral part of the Ravenscraig steel complex. Hon. Members without specialised knowledge of the steel industry are right to be concerned over the future of this basic industry. Most people would be satisfied with the programme of expansion which the British Steel Corporation had announced—suggesting that the industry would move by 1981 to producing 43 million tons and that over that period of time there would be expenditure of £4,000 million.
Concern has arisen because these ambitious expansion plans have been thrown in doubt because of the Government's decision to institute a general review of the steel industry. Concern has been felt by those interested in the industry's future about the Government's attitude to the price increase. The way in which this was handled, by a last-minute intervention on the part of the Prime Minister, hardly indicated that it was a well-considered decision. More important is the criteria which the Government are to apply during this general review. I am suspicious that this is not just an objective view to take stock of the future of the industry and to work out its development. There is being confused with a general review the Government's interest in hiving-off certain parts of the industry to private interests.
I was disturbed to read in the business section of yesterday's Sunday Times an article headed "Signs of a truce in steel battle." The article speaks of a difference of opinion between Lord Melchett

and the Government and goes on in the final paragraph:
… the Government, while determined to secure some measure of denationalisation, is anxious to avoid Melchett's resignation. Still less would it like to have to legislate to enforce any sales. But it can offer the bargaining counter of finance for B.S.C. expansion plans. So talks have settled down to simple horse-trading. So much development cash will be swapped for so much denationalisation and a truce for the steel industry may at last be within reach.
I hope that that article is inaccurate and that the Minister can tell us that the future of the steel industry is not being decided on the basis of horse-trading between the doctrinaire policies of the Government and the genuine needs of a development policy for the industry. To confuse the doctrinaire politics of the party opposite with the urgent need for a proper development plan for the industry is acting contrary to the national interest. I hope that there is none of this horse-trading going on and that the attitude being taken is that Britain needs a steel industry of the size envisaged by the Corporation and only if it reaches that size will there be any question of their being a green field site anywhere in the United Kingdom. There will be disputes between different parts of the House as to where the green field site should be. At this stage of the development of the steel industry we have to unite to make sure that there will be an expansion big enough to have a green field site anywhere in the United Kingdom. The matter is as serious as that. We must fight to ensure that the Government have a sufficient expansion plan, otherwise there will be nowhere in the United Kingdom for a green field site.
A great deal is said by Conservative Members about the criterion of profitability and that if there is to be any expansion of the industry it should be done only on a profitable basis. There is some elasticity in the meaning of the word "profitable", I hope it will not be thought to be a narrow, commercial criterion of short-term gain to be applied to the future of the steel industry. The notion of profitability should be looked at in a wider sense in the future, including the national interest. The sums of money involved to make the industry the great industry of the future are so large that to apply short term commercial criteria is to apply completely the wrong test. If ever there was an industry where


the Government has to combine a concern with the industry's future with the national interest as a whole, it is this particular industry at this particular time.
I do not care where the money comes from, whether from private or public sources, but the money should be found for the industry's expansion. Hon. Members opposite should abjure their doctrinal attitudes to public, as opposed to private, finance and units behind the proposition that we must enable this basic industry to reach a level at which we shall be a major steel-producing nation. If we do not do that, in the 1980s we shall find ourselves not only a minor steel-producing nation but a minor industrial country.

9.11 p.m.

Mr. Eric G. Varley: Like the debate which we had on 18th March, this debate has inevitably centred a good deal on the impact of the redundancies announced in the steel industry, and my hon. Friends have again related the hardship and problems in their constituencies. They are right to do so. As my hon. Friend the Member for Newport (Mr. Roy Hughes) said, with the unemployment position worse than at any time since the 1930s, the situation is one of desperate seriousness. Redundancies at any period are of great concern, but when they come at a time when the Government are taking no action to reflate the economy and when the Chancellor's Budget judgment is seen to do nothing to restore business confidence, every announcement of laying off of men is a double blow.
The debate also, quite rightly, has been concerned with the steel industry's future. One has only to talk to those who work in the industry to realise that morale is at a very low level. I was surprised when the Secretary of State said that there was no hostility between the Government and the British Steel Corporation. When the Government have subjected the Corporation to the sort of review and intervention that they have, and when the Corporation has these arm-twisting tactics inflicted upon it, it is stretching words a little, to suggest that there is no conflict. There is no doubt that a year ago people working in the industry had confidence in the future and the co-operation between men and

management had never been greater. But over the last few months all this has been shattered, and certainly in the last two months, since the last debate, there has been a further deterioration. For this situation the Government must take the entire responsibility.
The industry's workers and their unions realised that the restructuring of the industry was to take place. That has been mentioned by hon. Members opposite. But the crucial difference, and one which it is necessary to spell out, was that the co-operation and trust of all those who worked in the industry had been won. The whole package had been accepted by those in the industry.
The package consisted basically of a fundamental belief in an expanding steel industry; an expanding industry with secure employment prospects for those retained in it, an industry which was adequately capitalised, an industry capable of meeting the country's long-term needs in terms of output and balance of payments, an industry in which—if rationalisation were to take place—it would be done without panic and in a humane and civilised manner.
I do not think that that has happened over the last few months. In the past months the Government have subjected the industry to the most remorseless degree of intervention, something that the Secretary of State said he wanted to get away from. It would not be so bad if the intervention were based on a wish to get a better industry and not on political prejudice.
I am not saying that the political prejudice has come from the Secretary of State, but I think that there were others within his Department who were prejudiced against the Corporation. The hon. Member for Cambridge (Mr. Lane) mentioned the Conservative Party election manifesto, which contained these words:
We will progressively reduce the involvement of the State in the nationalised industries—for example, the steel industry.
There has been unprecedented intervention in this industry.
We had expected that the Secretary of State would have made a statement by today about the first phase of the review. On 5th April he said that the first part would be ready within six weeks. Today


he said that that had slipped by only two days. But 5th April was seven weeks ago.

Mr. Hardy: My hon. Friend has mentioned seven weeks. In fact, we are now in the tenth week since the Secretary of State gave that undertaking.

Mr. Varley: I do not place it exactly as my hon. Friend does. I calculate it as being about seven weeks. However, I agree with my hon. Friend that we had expected that by this time the Secretary of State would have made an announcement. Now the Government have got themselves into a tangle over the future of the industry. A statement was essential, because of the vital need to confirm the future of the industry's other product divisions, in the same way as the Secretary of State appeared to confirm the future of the bulk iron and steel making activities.
I want to put a question to the Minister for Industry about the Hunterston project. We were told by the Secretary of State that the bulk steel making activity would be intact and would remain part of the corporation. Rumours and reports are circulating that the Government are encouraging foreign interests to come into bulk steel making. There is a report circulating in Scotland that the Government are encouraging a Dutch interest to look at the Hunterston site as one of the possibilities for a new green field site. If there is any truth in that we should like to know the facts.
We were hopeful that at least the Secretary of State would have been able to confirm that the special steels, construction, chemicals and tubes would remain intact. We were specially hopeful that the Secretary of State would by now have had something to say about the additional price increase of 7 per cent. which was refused by the Government in April. Even in advance of the announcement that the right hon. Gentleman has promised about the review, the House is entitled to a statement from the Minister for Industry tonight about this price increase. I was encouraged when the hon. Member for the New Forest (Mr. Patrick McNair-Wilson) made it plain that the steel industry should be allowed to have the 14 per cent. or at least that other steps should be taken to tell us how the industry will cope.
We are told by the Press, at least, that the Secretary of State is, in principle, in favour of an additional price rise for the British Steel Corporation, but we know from other events that he cannot decide this matter in isolation. The Prime Minister has intervened. To a great extent, the evidence shows that the Prime Minister has taken over the pricing policy of the steel industry. The confusion becomes deeper and deeper. In its election manifesto, the Conservative Party said that it would reduce the involvement of the State in the steel industry, and, as I say, the Secretary of State, at meetings which we have had with him and again in the House today, seems to confirm that he too, is anxious to get away from this intervention. The Prime Minister, on the other hand, boasts that the steel industry is one of the props of his economic strategy.
On 15th May, when he addressed the Scottish Tories in Socialist Aberdeen, the Prime Minister had this to say:
When we acted to cut the proposed steel price increases in half, there was a howl of opposition.
There was a howl of approval at that; it was stirring stuff for the Scottish Tories. But the Prime Minister gave it all away when he blurted out at Question Time on 4th May:
What I do know is that the interference with those prices"—
that is, steel prices—
will give the whole of British industry a better opportunity of competing in world markets."—[OFFICIAL REPORT, 4th May, 1971; Vol. 816, c. 1169.]
So that is it. The Prime Minister says that that is part of his economic strategy, it is one of his economic props. As my hon. Friend the Member for Newport said, we thought that the only economic weapon which the Government had was unemployment, but now they have this other weapon, the use of the steel industry to subsidise our country's exports.
There may well be those who say, "Fair enough", who would welcome the Prime Minister's conversion to the principle of manipulating publicly-owned industries as an instrument of Socialist planning. But, if that be so, two fundamental questions arise. First, is it fair to the steel industry to expect it to subsidise privately-owned industry at the expense of its own workers' wages, as my hon.


Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths) said, and its employment structure? Second, if the steel industry is now such an integral part of the Government's economic strategy, is it not utter folly not to allow it to go ahead with its long-term plans to establish and secure its own future? The Prime Minister, with that sort of stuff in Aberdeen and in answer to Questions in the House, may get away with it on the spur of the moment, but he should not be allowed to get away with it without an explanation from the Government.
There is another side to the question. I do not dispute that there is something to be said for the Government taking action to stop price increases. But, as my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said, if the Prime Minister and the Government want to be taken seriously, and if they are intervening to improve the competitive position of British industry, it is about time they started taking action in other respects. When they take action, for example, to stop a price increase in the oil industry, which seems to put up its prices before the ink dries on the contracts it signs with the sheikhs, we may begin to take them seriously.
The House is entitled to know what the Government's attitude is now to the financial position of the British Steel Corporation. Is it, for example, the Government's firm intention to hold the price of steel down to a level below that which the market will plainly stand, below the level of European prices? If it is, the Minister should say so plainly when he winds up He should tell us whether it is the Government's policy, whether it is the Prime Minister's policy, as the right hon. Gentleman suggested on 4th May, to subsidise our export industries.
At the same time, let us be told what action the Government intend to take to stop comparable price increases in the private sector. Half the Corporation's turnover is accounted for by raw materials and the purchase of equipment. It is a section of its business over which it has only marginal control. The equipment and materials it requires have gone up by about 20 per cent. Everyone knows that that is a burden it cannot afford for long without encountering serious deficit. So before we have any more sort of

"Aims of Industry" howls about inefficient nationalised industries, we are entitled to be told by the Government exactly how they propose to deal with that matter.
We were hoping at least that the right hon. Gentleman would confirm that profitable parts of the steel industry would not be hived off. From time to time we hear from hon. Members opposite that the steel industry should be restricted to bulk steel making. That is most doctrinaire. Fortunately, today we have not heard that quite as much as on previous occasions. The hon. Members for Cambridge, the New Forest and Canterbury (Mr. Crouch) took quite a sensible view on these matters. They said that there would be a hiving on and a bit of hiving off, but they were reasonably flexible, unlike some hon. Members opposite who say that bulk steel making is for the Corporation and that the rest should be hived off. That is doctrinaire nonsense, and I am pleased to see a change of attitude among Conservative hon. Members.
Every industry, whether publicly- or privately-owned, seeks to diversify. All our great firms seek to diversify, and not to have done so would have led to economic ruin. It would have been madness to confine the Corporation to bulk steel making, the most debilitating formula that could possibly be inflicted on management. It would also be disastrous for the nation. I wonder how much time leading people within the Corporation have had to spend in trying to combat the Government's attempts to weaken the industry. There must have been hours and hours wasted between officials of the Department of Trade and Industry and the Corporation in sterile argument and wrangles about the shape of the industry. I cannot imagine for one moment that the officials of the Department had any enthusiasm for that. They cannot have had much stomach for this kind of exercise. But loyally they must have tried to fulfil the prejudices of their Ministers. I do not think that the prejudice is so much on the part of the Secretary of State, but it is to a great extent that of junior Ministers in his Department.
The so-called review is being carried out exclusively by officials, we understand. We at least expected a Minister


to head it. At least the Minister for Industry or the Under-Secretary ought to have been prepared to carry out this work, which I firmly believe they started.
The Government would do well to take note of what the Confederation of British Industry has said on this matter. Mr. Campbell Adamson, speaking at Cambridge during the last 12 days, and reported in the Financial Times, said of the "unhealthy"—his own word—degree of uncertainty about the Government's intentions towards the nationalised industries:
Public corporations must be subject to the same disciplines as the private sector. Equally, Government should not interfere with the day-to-day operations of the corporations".
He went on to say:
Government should stop using public corporations as instruments of Government policy. Public corporations should be operated in a commercial manner. Any manufacture undertaken or services provided at the request of Government for reasons of social policy should be treated separately in the accounts. If publicly-owned corporations were to operate commercially, and were to recruit and retain management of high quality, they must have some freedom to undertake ancillary activities in the same way as the Boards of private companies might decide to diversify".
He continued:
… no industry can operate successfully if it is continually in doubt about its long-term future".
That is the most damning condemnation of the Government. In all aspects that speech might have been delivered with the British Steel Corporation and its situation in mind and the Government would do well to heed it. We are told that the Director-General of the C.B.I. is to talk to the Secretary of State for Trade and Industry soon. He probably talks to him much more often than I get to know about from my research. The right hon. Gentleman should heed Mr. Campbell Adamson's advice.
Mr. Campbell Adamson seemed to have found support in The Times only four days ago. Under the heading
Fair play for the British Steel Corporation",
The Times said:
Ministers must make up their mind once and for all whether they are going to allow the Corporation to set its own prices, or whether they will provide money in other ways to finance the industry's capital pro-

jects … ministers cannot on the one hand preach the gospel of less interference in state industries, and on the other peg the price of steel and castigate the corporation for failing to move into the black … ending the intolerable uncertainty to which the industry has been subjected for so long".
If Britain is to strengthen its industrial position, if we care about the future standard of living and full employment of those who work in it and the future economic prospects for our nation, we must have a strong and secure steel industry. The Government must face this fundamental issue: do they really want a steel industry of the size and strength to meet our future needs? They must make up their mind whether they will continually niggle and harry the Corporation to suit basically the prejudices of the junior Ministers in the Department of Trade and Industry or the whims of the Prime Minister.
Our very standard of living—that is the sort of level on which I put this matter—and, equally important, a high level of employment are dependent upon an expanding steel industry and not a declining industry bewildered and frustrated by Government intervention. We hope that eventually, even under this Government, the economy will get moving again and we shall have a strong steel industry. But over the past few months the Government have failed the industry and those who work in it, basically not to achieve a better steel industry, but out of political prejudice, and motivated for that reason, in direct contradiction of their election manifesto. They have replaced what I believe to have been a carefully phased plan with uncertainty, apprehension and confusion.
For these reasons I call on the House to vote against this example of new-style Tory Government—Tory Government that we should regret.

9.35 p.m.

The Minister for Industry (Sir John Eden): Like other hon. Members who have spoken in this debate I welcome the fact that it is taking place. I agreed very much with the words which were used by my hon. Friend the Member for Canterbury (Mr. Crouch) who said that he felt that this was a more constructive debate than our last one. I am sure that that is so, and I am sure that other hon. Members who have taken part in it will feel the same thing.
I think that this fact owes very much—I hope not to cause any embarrassment to him by saying so—to the way in which the hon. Gentleman the Member for Ebbw Vale (Mr. Michael Foot) opened the case for the Opposition. He seemed to recognise that there has to come a time when, to use a phrase quoted by my hon. Friend the Member for the New Forest (Mr. Patrick McNair-Wilson), it would be helpful to bring to an end the political onslaughts on this industry. I think the hon. Gentleman the Member for Ebbw Vale was saying that largely because he realised as much as does every hon. Gentleman, I think, who has a steel industry constituency, or is in any way closely associated with the steel industry, that there are large numbers of people outside this House who have a very real concern in the decisions which this Government are considering, and are, therefore, watching very closely indeed the course of the debates and the nature of the discussions affecting this industry. I absolutely understand that, and I agree very much on this point with my hon. Friend the Member for Cambridge (Mr. Laine), who dwelt on this in his very constructive speech, when he reminded us here of the number of people who are affected by our consideration of this industry.
It has often been used as a taunt against me that I do not have any steel works in my constituency, but this, happily, has not prevented me from becoming very closely associated with the industry. During the last few months I have been in Government I have had opportunity, as some hon. Members know, to visit many of the major works, and to meet many of the people concerned with them. I should like just to put on record—and I think anybody who has been through this experience will agree with me—that the great quality and the calibre of the people one meets in the industry is absolutely second to none.
This is an industry which has, sadly for it, but understandably, I think, always been very susceptible to political pressures. Nationalisation was an extreme example of that, and to have inflicted it twice on the industry was really ideology gone mad Hon. Gentlemen opposite have frequently, during this debate and at other times, accused us during these last

few months of contributing towards uncertainty in the industry, but, as many of my hon. Friends have said, this is as nothing to the damage which hon. Gentlemen opposite did to this industry twice in recent years.

Mr. Dennis Skinner: The Minister is talking about nationalisation of the industry twice, but will he give any indication at all whether or not he would make the same comment if we re-nationalise once again some of the hived-off parts of industry, as he is proposing they should be hived off?

Sir J. Eden: I think that the hon. Gentleman had better wait to see the course which events take and whether he or his party are ever again in the position to do some of the damage they did. I am sure that not even the most ardent advocates of nationalisation could claim that their hopes for it had been realised in the event.
However, as my right hon. Friend the Secretary of State for Trade and Industry said, although we have always been opposed to the methods employed, there were, clearly, aims and objectives of which, broadly speaking, one approved. One of those objectives was to cut out uneconomic units within the organisation itself, and the other was to work towards larger, integrated production units. It was with these objectives in mind——

Mr. Eric S. Heffer: Why was it not done under private enterprise? That was the whole point of nationalisation.

Sir J. Eden: Clearly, the hon. Gentleman has not studied the Benson proposals——

Mr. Heffer: Never mind about the proposals.

Sir J. Eden: If this industry had been left to develop in the normal course of events——

Mr. Heffer: —we would not have one.

Sir J. Eden: —we would have more than one unit of ownership at present and probably far greater profitability.
The objectives which I have defined are broadly acceptable to both sides of the House, and it was with these objectives in


mind, and with an awareness of the nature of international developments, that we began our study of this industry. I was struck by the speech of my hon. Friend the Member for the New Forest, and I assure him that in our study we had a real understanding of what he described as the technological, economic and political influences at work in the industry. It was in pursuit of these same objectives that the closure programme was recently announced. It has always been made plain that substantial rationalisation of production facilities was essential if the Corporation was to become financially viable and achieve the level of efficiency necessary to meet international competition.
This has been well understood and fully accepted. I agree with the hon. Member for Cleveland (Mr. Tinn) that it is to the credit of the trade unions that they have understood from the beginning that a substantial reduction in our total iron and steel making labour force was the unavoidable result of this rationalisation process. This is still clearly understood, and everyone who has the future of the industry at heart knows full well that it has to go through this process, painful though it is to individuals affected by it, to achieve that degree of stability and viability which is the aim.

Mr. John Mendelson: Will the Minister assure the House and the steel industry that the Government will adhere to the original plan proposed by Lord Melchett of spreading redundancies over five, seven, eight or ten years, and that, as part and parcel of these redundancies, new steel capacity will be brought into existence and new jobs created so that redundancies are reduced to a minimum?

Sir J. Eden: I am coming on to these points. I would prefer to keep to the sequence I have prepared.

Mr. Michael Foot: Before the hon. Gentleman claims, as is the case, that the unions agreed to the development plan, surely he must accept that they agreed only on the basis that expansion would go forward. We want to know when the Government will allow it to go forward.

Sir J. Eden: This is the point made by the hon. Member for Penistone (Mr.

John Mendelson). This is the whole point of the debate and of the review. These answers will be coming forward.
I think the House accepts that this process of closure in the first stage is recognised as being essential in the progress towards viability. There is a clear need to base the order load on more modern, low-cost plant rather than aggravate the difficulties of the Corporation by keeping older, less efficient and more costly plant in operation when it can be closed.
The closures which have been announced are to be spread forward over a period of years, the main ones taking place in 1971–73. The whole package of proposals for closures which it is within the power of the Corporation to make are subject to discussions with the unions concerned. These have already begun. The exact timing of them will obviously depend on the conclusion of the discussions in which the Corporation is engaged. Discussions are also taking place with regional planning authorities—and this answers a point raised by my hon. Friend the Member for Canterbury—with the local authorities and the Government Departments concerned on the total employment effects. Naturally we have to have regard to the level of unemployment in areas affected by other, more general economic pressures. We have this very much in mind, and my right hon. Friend the Chancellor had this in mind in his Budget proposals. We hope that these will lead to a considerable upturn generally.

Mr. John Mendelson: What about the expansion of the industry?

Sir J. Eden: I am coming to that. The Corporation has its own social policy unit which is working to achieve maximum redeployment, both within the Corporation and outside it. It will also do its best to assist in the creation of new jobs in areas affected by the closures. It is in this context that I shall refer to the speeches of my hon. Friends the Members for Stretford (Mr. Churchill) and Rossendale (Mr. Bray) concerning the situation affecting employment at Irlam.
Irlam is a particularly difficult decision for the Corporation, because here is an area where the employment prospects are very much dependent on the Corporation


or upon steel-making activities. The hon. Member for Stretford was careful to say that it need not rest solely with the Corporation. The point that really matters in a case like Irlam is not whether it is public or private sector but that there shall be some employment prospects for the people affected to this degree by the proposed closure. I hope that in giving consideration to this, the Corporation will make every effort to view most sympathetically any proposals which would result in continued employment for the men affected. I am sure that it will do so and I am sure that it would be in furtherance of the aims and objectives of the social policy unit if it was to do it as openly and constructively as possible.
The main contention of the Opposition has been that closures, on the one hand, are all very well and it understands the need for them, but they must be balanced, on the other hand, by an investment programme in new plant and capacity. I understand this and it is not our purpose to bring the Corporation to a standstill or to bring the industry to an end. We could not do this even if we were so minded and it would be an absurd attitude to take. We have been confronted with the paradox of the prospect of unprofitability on the one hand and the very ambitious scale of the Corporation's investment plans on the other.
These two factors coming together forced us into having to conduct a penetrating re-appraisal into four separate but closely inter-related studies. There is the short-term financial review affecting plans for the year 1971–72, there is the longer-term strategy for a decade, there is the review of the structure of the industry as a whole, and there is the relationship between the Government and the industry. Those are the four strands in one's whole study of the industry and the implications for its future development in the economy.
The short-term financial review will cover the anticipated financial out-turn and, of course, implications for pricing. A number of hon. Members, including the hon. Member for Consett (Mr. David Watkins), the hon. Member for Rother Valley (Mr. Hardy), and the hon. Member for Chesterfield (Mr. Varley), as well as some of my hon. Friends, asked about pricing and the prospective future pricing

policy under this Government. I take this opportunity to remind hon. Members opposite of their own intervention when they were in office. When proposals for price increases were put forward by the Corporation, they were referred to the National Board for Prices and Incomes and were subjected to abatement by the then Government. There is the additional fact that in October of last year the Government approved the full price increase requested by the Corporation. That was done against a large part of opinion in the country. That was fairly rapidly followed by the last price increase proposal, and we have to take account of views put to us by the independent sector and by steel users.
As my hon. Friend the Member for Stretford said, many users of steel were concerned not only at the extent of the price increases proposed but at the speed with which they followed ones which had only recently been endorsed. We also had to take account of the fact that certain statutory procedures are involved as a result of the 1967 Act in the event of views being expressed by the Iron and Steel Consumers Council. That body made formal representations to the Government, and, as a result of measures brought into law by the previous Administration, we had no alternative but to react to them.
The short-term financial review will also consider the investment programme in the context of the £185 million programme which was approved by the Government towards the end of last year. There is no justification for seeking to imply that in investment terms we are bringing the industry to a standstill. One has only to look back over the figures to realise that. In 1968–69 the industry's investment programme was £62 million; in 1969–70 it was £80 million; in 1970–71 it was £140 million; and that for 1971–72 approved at the end of last year is £185 million.
It is in that context that one should see the Ravenscraig decision. Although we have tried patiently to explain this matter to the hon. Member for Motherwell (Mr. Lawson), he still feels perplexed by it.

Mr. Lawson: So does everybody else.

Sir J. Eden: Then perhaps I should try to spell out the matter for the hon.


Member again. The Ravenscraig proposal was accepted by the then Government in early 1970 and was included in the Corporation's capital development programme. Approval was given in November, 1970, by the present Government for expenditure of £185 million in 1971–72. It is this which is now subject to the present review.
As a result of this review, my right hon. Friend asked the Corporation to submit for his approval any particular projects with which it wished to proceed. Ravenscraig is one of the projects on which expenditure might be incurred by the Corporation in 1971–72, but the start on the projects during the course of the short-term review is subject to special approval. The Corporation has not brought forward a request to start Ravenscraig while the review has been in progress. Therefore, there has been no immediate proposal before the Government and the Government have not held back work at Ravenscraig. This matter is not in the same context as that at Llanwern. This is in the hands of the B.S.C. and I have no doubt that, in the light of the announcement of the decisions on the review, which my right hon. Friend has said will take place as soon as possible after Whitsun, it will then be for the Corporation to decide about the project within the approved level of investment. I hope that makes the matter abundantly clear to the hon. Member for Motherwell.

Mr. Lawson: Does the hon. Gentleman agree that what I said earlier is correct—in other words, if we understand what he is now saying, there are no schemes whatever now being held up by the Government?

Sir J. Eden: The hon. Gentleman has got the message quite clearly from the very detailed and careful elucidation I gave to him just now on the question of Ravenscraig. In addition to the short-term review, there is also the question of

the long-term project side, which will bring into consideration all those matters to which my hon. Friend the Member for Canterbury and others referred: the question of the extent of the expansion of the industry, whether or not to proceed with the green field site, ore and coking coal supplies, the greater degree of manufacturing operation to take place at the source of raw material supply, and we are bound to have in mind the views put forward in the interesting speech of my hon. Friend the Member for Sheffield, Heeley (Mr. Spence). We will also have to take into account the regional implications and the question of developing technology.

Mr. Tinn: Mr. Tinn rose——

Sir J. Eden: These are all matters which are bound up in the long-term review, and then are of fundamental importance to the nature of the steel industry.
The hon. Member for Ebbw Vale and others took us to task for the fact that the short-term review had been handled by officials. This does not in any way detract from Ministerial responsibility. Ministers have got to take the decisions, and we will take them, taking into account the full interests of the industry and the economy of this country. We will also take into account, since the opportunity has been given us to do so, the views expressed by hon. Members during this debate. May I finally emphasise to the House——

Mr. Joseph Harper: Mr. Joseph Harper (Pontefract) rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the Amendment be made:—

The House divided: Ayes 272, Noes 224.

Division No. 371.]
AYES
[10.0 p.m.


Adley, Robert
Barber, Rt. Hn. Anthony
Bossom, Sir Clive


Alison, Michael (Barkston Ash)
Batsford, Brian
Bowden, Andrew


Allason, James (Hemel Hempstead)
Beamish, Col. Sir Tufton
Boyd-Carpenter, Rt. Hn. John


Amery, Rt. Hn. Julian
Bell, Ronald
Braine, Bernard


Archer, Jeffrey (Louth)
Benyon, W.
Bray, Ronald


Astor, John
Biffen, John
Brewis, John


Atkins, Humphrey
Biggs-Davison, John
Brinton, Sir Tatton


Awdry, Daniel
Boardman, Tom (Leicester, S. W.)
Brocklebank-Fowler, Christopher


Baker, Kenneth (St. Marylebone)
Body, Richard
Brown, Sir Edward (Bath)


Baker, W. H. K. (Banff)
Boscawen, Robert
Bruce-Gardyne, J.




Buchanan-Smith, Alick (Angus, N &amp; M)
Holland, Philip
Pink, R. Bonner


Buck, Antony
Hordern, Peter
Pounder, Rafton


Bullus, Sir Eric
Hornby, Richard
Powell, Rt. Hn. J. Enoch


Burden, F. A.
Hornsby-Smith, Rt. Hn. Dame Patricia
Price, David (Eastleigh)


Campbell, Rt. Hn. G. (Moray &amp; Nairn)
Howe, Hn. Sir Geoffrey (Reigate)
Proudfoot, Wilfred


Carlisle, Mark
Howell, David (Guildford)
Quennell, Miss J. M.


Channon, Paul
Howell, Ralph (Norfolk, N.)
Raison, Timothy


Chapman, Sydney
Hunt, John
Redmond, Robert


Chichester-Clark, R.
Hutchison, Michael Clark
Reed, Laurance (Bolton, E.)


Churchill, W. S.
Iremonger, T. L.
Rees, Peter (Dover)


Clark, William (Surrey, E.)
James, David
Rees-Davies, W. R.


Clarke, Kenneth (Rushcliffe)
Jenkin, Patrick (Woodford)
Renton, Rt. Hn. Sir David


Clegg, Walter
Jennings, J. C. (Burton)
Rhys Williams, Sir Brandon


Cockeram, Eric
Jessel, Toby
Ridley, Hn. Nicholas


Cooke, Robert
Johnson Smith, G. (E. Grinstead)
Ridsdale, Julian


Coombs, Derek
Jones, Arthur (Northants, S.)
Roberts, Wyn (Conway)


Cooper, A. E.
Jopling, Michael
Rodgers, Sir John (Sevenoaks)


Cordle, John
Joseph, Rt. Hn. Sir Keith
Rossi, Hugh (Hornsey)


Corfield, Rt. Hn. Frederick
Kellett, Mrs. Elaine
Rost, Peter


Cormack, Patrick
Kershaw, Anthony
Royle, Anthony


Costain, A. P.
Kilfedder, James
Russell, Sir Ronald


Critchley, Julian
Kimball, Marcus
Scott-Hopkins, James


Crouch, David
King, Evelyn (Dorset, S.)
Sharples, Richard


Crowder, F. P.
King, Tom (Bridgwater)
Shaw, Michael (Sc'b'gh &amp; Whitby)


Curran, Charles
Kinsey, J. R.
Shelton, Willliam (Clapham)


Davies, Rt. Hn. John (Knutsford)
Kirk, Peter
Simeons, Charles


d'Avigdor-Goldsmid, Sir Henry
Knight, Mrs. Jill
Sinclair, Sir George


d'Avigdor-Goldsmid, Maj.-Gen. James
Knox, David
Skeet, T. H. H.


Dean, Paul
Lambton, Antony
Smith, Dudley (W'wick &amp; L'mington)


Deedes, Rt. Hn. W. F.
Lane, David
Soref, Harold


Digby, Simon Wingfield
Langford-Holt, Sir John
Speed, Keith


Dixon, Piers
Legge-Bourke, Sir Harry
Spence, John


Douglas-Home, Rt. Hn. Sir Alec
Le Marchant, Spencer
Sproat, Iain


Drayson, G. B.
Lewis, Kenneth (Rutland)
Stainton, Keith


Dykes, Hugh
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Stanbrook, Ivor


Eden, Sir John
Longden, Gilbert
Steel, David


Elliot, Capt. Walter (Carshalton)
Loveridge, John
Stewart-Smith, D. G. (Belper)


Elliott, R. W. (N'c'tle-upon-Tyne, N.)




Eyre, Reginald
Luce, R, N.
Stodart, Anthony Edinburgh, W.)


Farr, John
McAdden, Sir Stephen
Stoddart-Scott, Col. Sir M.


Fenner, Mrs. Peggy
MacArthur, Ian
Stokes, John


Fidler, Michael
McCrindle. R. A.
Stuttaford, Dr. Tom


Finsberg, Geoffrey (Hampstead)
McLaren, Martin
Sutcliffe, John


Fisher, Nigel (Surbiton)
Maclean, Sir Fitzroy
Taylor, Sir Charles (Eastbourne)


Fletcher-Cooke, Charles
Macmillan, Maurice (Famham)
Taylor, Edward M. (G'gow, Cathcart)


Fookes, Miss Janet
McNair-Wilson, Michael
Taylor, Frank (Moss Side)


Fortescue, Tim
McNair-Wilson, Patrick (NewForest)
Tebbit, Norman


Fowler, Norman
Maddan, Martin
Temple, John M.


Fox, Marcus
Madel, David
Thatcher, Rt. Hn. Mrs. Margaret


Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
Maginnis, John E.
Thomas, John Stradling (Monmouth)


Fry, Peter
Marples, Rt. Hn. Ernest
Thompson, Sir Richard (Croydon, S.)


Galbraith, Hn. T. G.
Marten, Neil
Thorpe, Rt. Hn. Jeremy


Gardner, Edward
Mather, Carol
Tilney, James


Gibson-Watt, David
Maude, Angus
Trafford, Dr. Anthony


Gilmour, Sir John (Fife, E.)
Maudling. Rt. Hn. Reginald
Trew, Peter


Glyn, Dr. Alan
Mawby, Ray
Tugendhat, Christopher


Godber, Rt. Hn. J. B.
Maxwell-Hyslon, R. J.
Turton, t. Hn. R. H.


Goodhew, Victor
Meyer, Sir Anthony
van Straubenzee, W. R.


Gorst, John
Mills, Peter (Torrington)



Gower, Raymond
Mills, Stratton (Belfast, N.)
Vaughan, Dr. Gerard


Gray, Hamish
Mitchell. Lt.- Col. C. (Aberdeenshire, W.)
Vickers, Dame Joan


Green, Alan
Mitchell. David (Basingstoke)
Waddington, David


Griffiths, Eldon (Bury St. Edmunds)
Moate, Roger
Walder, David (Clitheroe)


Grimond, Rt. Hn. J.
Molyneaux, James
Walker-Smith, Rt. Hn. Sir Derek


Grylls, Michael
Money, Ernie
Walters, Dennis


Gummer, Selwyn
Morgan, Geraint (Denbigh)
Ward, Dame Irene


Gurden, Harold
Morrison, Charles (Devizes)
Warren, Kenneth


Hall, Miss Joan (Keighley)
Mudd, David
Weatherill, Bernard


Hall, John (Wycombe)
Murton, Oscar
White, Roger (Gravesend)


Hall-Davis, A. G. F.
Neave, Airey
Whitelaw, Rt. Hn. William


Hamilton, Michael (Salisbury)
Nicholls, Sir Harmar
Wiggin, Jerry


Hannam, John (Exeter)
Noble, Rt. Hn. Michael
Wilkinson, John


Harrison, Brian (Maldon)
Normanton, Tom
Wolrige-Gordon, Patrick


Harrison, Col. Sir Harwood (Eye)
Nott, John
Wood, Rt. Hn. Richard


Haselhurst, Alan
Onslow, Cranley
Woodhouse, Hn. Christopher


Havers, Michael
Orr, Capt. L. P. S.
Woodnutt, Mark


Hawkins, Paul
Osborn, John
Worsley, Marcus


Hay, John
Owen, Idris (Stockport, N.)
Wylie, Rt. Hn. N. R.


Heseltine, Michael
Page, Graham (Crosby)
Younger, Hn. George


Hicks, Robert
Page, John (Harrow, W.)



Higgins, Terence L.
Parkinson, Cecil (Enfield, W.)
TELLERS FOR THE AYES:


Hiley, Joseph
Percival, Ian
Mr. Jasper More and


Hill, John E. B. (Norfolk, S.)
Peyton, Rt. Hn. John
Mr. Hector Monro.







NOES


Abse, Leo
Harrison, Walter (Wakefield)
O'Malley, Brian


Albu, Austen
Hart, Rt. Hn. Judith
Oram, Bert


Allaun, Frank (Salford, E.)
Heffer, Eric S.
Orbach, Maurice


Archer, Peter (Rowley Regis)
Horam, John
Orme, Stanley


Armstrong, Ernest
Houghton, Rt. Hn. Douglas
Oswald, Thomas


Ashton, Joe
Huckfield, Leslie
Owen, Dr. David (Plymouth, Sutton)


Atkinson, Norman
Hughes, Rt. Hn. Cledwyn (Anglesey)
Paget, R. T.


Bagier, Gordon A. T.
Hughes, Mark (Durham)
Palmer, Arthur


Barnett, Joel
Hughes, Robert (Aberdeen, N.)
Pannell, Rt. Hn. Charles


Beaney, Alan
Hughes, Roy (Newport)
Parker, John (Dagenham)


Bennett, James (Glasgow, Bridgeton)
Hunter, Adam
Parry, Robert (Liverpool, Exchange)


Bidwell, Sydney
Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Pavitt, Laurie


Blenkinsop, Arthur
Janner, Greville
Peart, Rt. Hn. Fred


Boardman, H. (Leigh)
Jay, Rt. Hn. Douglas
Pentland, Norman


Booth, Albert
Jeger, Mrs. Lena (H'b'n &amp; St. P'cras, S.)
Prentice, Rt. Hn. Reg.


Boyden, James (Bishop Auckland)
Jenkins, Hugh (Putney)
Price, J. T. (Westhoughton)


Bradley, Tom
Jenkins, Rt. Hn. Roy (Stechford)
Price, William (Rugby)


Brown, Hugh D. (G'gow, Provan)
John, Brynmor
Probert, Arthur


Brown, Ronald (Shoreditch &amp; F'bury)
Johnson, Carol (Lewisham, S.)
Rankin, John


Buchan, Norman
Johnson, James (K'ston-on-Hull, W.)
Reed, D. (Sedgefield)


Buchanan, Richard (G'gow, Sp'burn)
Jones, Barry (Flint, E.)
Rees, Merlyn (Leeds, S.)


Butler, Mrs. Joyce (Wood Green)
Jones, Dan (Burnley)
Rhodes, Geoffrey


Callaghan, Rt. Hn. James
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Richard, Ivor


Campbell, I. (Dunbartonshire, W.)
Jones, Gwynoro (Carmarthen)
Roberts, Albert (Normanton)


Carmichael, Neil
Jones, T. Alec (Rhondda, W.)
Roberts, Rt. Hn. Goronwy (Caernarvon)


Carter-Jones, Lewis (Eccles)
Judd, Frank
Robertson, John (Paisley)


Castle, Rt. Hn. Barbara
Kaufman, Gerald
Roderick, Caerwyn E. (Br'c'n &amp; R'dnor)


Clark, David (Colne Valley)
Kelley, Richard
Roper, John


Concannon, J. D.
Kerr, Russell
Rose, Paul B.


Conlan, Bernard
Kinnock, Neil
Ross, Rt. Hn. William (Kilmarnock)


Corbet, Mrs. Freda
Lambie, David
Sheldon, Robert (Ashton-under-Lyne)


Cox, Thomas (Wandsworth, C.)
Lamond, James
Shore, Rt. Hn. Peter (Stepney)


Crawshaw, Richard
Latham, Arthur
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)


Cronin, John
Lawson, George
Short, Mrs. Renée (W'hampton, N. E.)


Crossman, Rt. Hn. Richard
Leadbitter, Ted
Silkin, Rt. Hn. John (Deptford)


Dalyell, Tam
Lee, Rt. Hn. Frederick
Silkin, Hn. S. C. (Dulwich)


Darling, Rt. Hn. George
Leonard, Dick
Sillars, James


Davidson, Arthur
Lestor, Miss Joan
Silverman, Julius


Davies, Denzil (Llanelly)
Lever, Rt. Hn. Harold
Skinner, Dennis


Davies, G. Elfed (Rhondda, E.)
Lewis, Arthur (W. Ham N.)
Small, William


Davies, Ifor (Gower)
Lewis, Ron (Carlisle)
Smith, John (Lanarkshire, N.)


Davis, Clinton (Hackney, C.)
Lipton, Marcus
Spearing, Nigel


Deakins, Eric
Loughlin, Charles
Spriggs, Leslie


Delargy, H. J.
Lyon, Alexander W. (York)
Stallard, A. W.


Dell, Rt. Hn. Edmund
Lyons, Edward (Bradford, E.)
Stoddart, David (Swindon)


Dempsey, James
Mabon, Dr. J. Dickson
Stonehouse, Rt. Hn. John


Doig, Peter
McBride, Neil
Strang, Gavin


Douglas, Dick (Stirlingshire, E.)
McCartney, Hugh
Strauss, Rt. Hn. G. R.


Douglas-Mann, Bruce
McElhone, Frank
Summer-skill, Hn. Dr. Shirley


Driberg, Tom
McGuire, Michael
Swain, Thomas


Dunnett, Jack
Mackenzie, Gregor
Taverne, Dick


Eadie, Alex
Mackie, John
Thomas, Jeffrey (Abertillery)


Edwards, Robert (Bilston)
Mackintosh, John P.
Thomson, Rt. Hn. G. (Dundee, E.)


Edwards, William (Merioneth)
Maclennan, Robert
Tinn, James


Ellis, Tom
McMillan, Tom (Glasgow, C.)
Tomney, Frank


English, Michael
Mahon, Simon (Bootle)
Torney, Tom


Evans, Fred
Mallalieu, J. P. W. (Huddersfield, E.)
Tuck, Raphael


Fernyhough, Rt. Hn. E.




Fletcher, Raymond (Ilkeston)
Marks, Kenneth
Varley, Eric G.


Foot, Michael
Marquand, David
Wainwright, Edwin


Ford, Ben
Marsden, F.
Walden, Brian (B'm'ham, All Saints)


Forrester, John
Mason, Rt. Hn. Roy
Walker, Harold (Doncaster)


Fraser, John (Norwood)
Mayhew, Christopher
Watkins, David


Freeson, Reginald
Meacher, Michael
Weitzman, David


Galpern, Sir Myer
Mellish, Rt. Hn. Robert
Wells, William (Walsall, N.)


Gilbert, Dr. John
Mendeison, John
White, James (Glasgow, Pollok)


Golding, John
Mikardo, Ian
Whitehead, Phillip


Gordon Walker, Rt. Hn. P. C.
Millan, Bruce
Willey, Rt. Hn. Frederick


Grant, George (Morpeth)
Milne, Edward (Blyth)
Williams, Alan (Swansea, W.)


Grant, John D. (Islington, E.)
Molloy, William
Williams, W. T. (Warrington)


Griffiths, Eddie (Brightside)
Morgan, Elystan (Cardiganshire)
Wilson, Alexander (Hamilton)


Gunter, Rt. Hn. R. J
Morris, Alfred (Wythenshawe)
Woof, Robert


Hamilton, William (Fife, W.)
Mulley, Rt. Hn. Frederick



Hamling, William
Murray, Ronald King
TELLERS FOR THE NOES:


Hannan, William (G'gow, Maryhill)
Ogden, Eric
Mr. Donald Coleman and


Hardy, Peter
O'Halloran, Michael
Mr. Alan Fitch.


Harper, Joseph

Main Question, as amended, put.—

The House divided: Ayes 271, Noes 223.

Division No. 372]
AYES
[10.13 p.m.


Adley, Robert
Fox, Marcus
McNair-Wilson, Michael


Alison, Michael (Barkston Ash)
Fraser, Rt. Hn. Hugh (St'fford &amp; Stone)
McNair-Wilson, Patrick (NewForest)


Alison, James (Hemel Hempstead)
Fry, Peter
Maddan, Martin


Amery, Rt. Hn. Julian
Galbraith, Hn, T. G.
Madel, David


Archer, Jeffrey (Louth)
Gardner, Edward
Maginnis, John E.


Astor, John
Gibson-Watt, David
Marples, Rt. Hn. Ernest


Atkins, Humphrey
Gilmour, Sir John (Fife, E.)
Marten, Neil


Awdry, Daniel
Glyn, Dr. Alan
Mather, Carol


Baker, Kenneth (St. Marylebone)
Godber, Rt. Hn. J. B.
Maude, Angus


Baker, W. H. K. (Banff)
Goodhew, Victor
Maudling, Rt. Hn. Reginald


Barber, Rt. Hn. Anthony
Gorst, John
Mawby, Ray


Batsford, Brian
Gower, Raymond
Maxwell-Hyslop, R. J.


Beamish, Col. Sir Tufton
Gray, Hamish
Meyer, Sir Anthony


Bell, Ronald
Green, Alan
Mills, Peter (Torrington)


Benyon, W.
Griffiths, Eldon (Bury St. Edmunds)
Mills, Stratton (Belfast, N.)


Biffen, John
Grimond, Rt. Hn. J.
Mitchell, Lt -Col. C. (Aberdeenshire, W.)


Biggs-Davison, John
Grylls, Michael
Mitchell, David (Basingstoke)


Boardman, Tom (Leicester, S. W.)
Gummer, Selwyn
Moate, Roger


Body, Richard
Gurden, Harold
Molyneaux, James


Boscawen, Robert
Hall, Miss Joan (Keighley)
Money, Ernie


Bossom, Sir Clive
Hall, John (Wycombe)
Morgan, Geraint (Denbigh)


Bowden, Andrew
Hall-Davis, A. G. F.
Morrison, Charles (Devizes)


Boyd-Carpenter, Rt. Hn. John
Hamilton, Michael (Salisbury)
Mudd, David


Braine, Bernard
Hannam, John (Exeter)
Murton, Oscar


Bray, Ronald
Harrison, Brian (Maldon)
Neave, Airey


Brewis, John
Haselhurst, Alan
Nicholls, Sir Harmar


Brinton, Sir Tatton
Havers, Michael
Noble, Rt. Hn. Michael


Brocklebank-Fowler, Christopher
Hawkins, Paul
Normanton, Tom


Brown, Sir Edward (Bath)
Hay, John
Nott, John


Bruce-Gardyne, J.
Heseltine, Michael
Onslow, Cranley


Buchanan-Smith, Alick (Angus, N&amp;M)
Hicks, Robert
Orr, Capt. L. P. S.


Buck, Antony
Higgins, Terence L.
Osborn, John


Bullus, Sir Eric
Hiley, Joseph
Owen, Idris (Stockport, N.)


Burden, F. A.
Hill, John E. B. (Norfolk, S.)
Page, Graham (Crosby)


Campbell, Rt. Hn. G. (Moray &amp; Nairn)
Holland, Philip
Page, John (Harrow, W.)


Carlisle, Mark
Hordern, Peter
Parkinson, Cecil (Enfield, W.)


Channon, Paul
Hornby, Richard
Percival, Ian


Chapman, Sydney
Hornsby-Smith. Rt. Hn. Dame Patricia
Peyton, Rt. Hn. John


Chichester-Clark, R.
Howe, Hn. Sir Geoffrey (Reigate)
Pink, R. Bonner


Churchill, W. S.
Howell, David (Guildford)
Pounder, Rafton


Clark, William (Surrey, E.)
Howell, Ralph (Norfolk, N.)
Powell, Rt. Hn. J. Enoch


Clarke, Kenneth (Rushcliffe)
Hunt, John
Price, David (Eastleigh)


Clegg, Walter
Hutchison, Michael Clark
Proudfoot, Wilfred


Cockeram, Eric
Iremonger, T. L.
Quennell, Miss J. M.


Cooke, Robert
James, David
Raison, Timothy


Coombs, Derek
Jenkin, Patrick (Woodford)
Redmond, Robert


Cooper, A. E.
Jennings, J. C. (Burton)
Reed, Laurance (Bolton, E.)


Cordle, John
Jessel, Toby
Rees, Peter (Dover)


Corfield, Rt. Hn. Frederick
Johnson Smith, G. (E. Grinstead)
Rees-Davies, W. R.


Cormack, Patrick
Jones, Arthur (Northants, S.)
Renton, Rt. Hn. Sir David


Costain, A. P.
Jopling, Michael
Rhys Williams, Sir Brandon


Critchley, Julian
Joseph, Rt. Hn. Sir Keith
Ridley, Hn. Nicholas


Crouch, David
Kellett, Mrs. Elaine
Ridsdale, Julian


Crowder, F. P.
Kershaw, Anthony
Roberts, Wyn (Conway)


Curran, Charles
Kilfedder, James
Rodgers, Sir John (Sevenoaks)


Davies, Rt. Hn. John (Knutsford)
Kimball, Marcus
Rossi, Hugh (Hornsey)


d'Avigdor-Goldsmid, Sir Henry
King, Evelyn (Dorset, S.)
Rost, Peter


d'Avigdor-Goldsmid, Maj.-Gen. James
King, Tom (Bridgwater)
Royle, Anthony


Dean, Paul
Kinsey, J. R.
Russell, Sir Ronald


Deedes, Rt. Hn. W. F.
Kirk, Peter
Scott-Hopkins, James


Digby, Simon Wingfield
Knight, Mrs. Jill
Sharples, Richard


Dixon, Piers
Knox, David
Shaw, Michael (Sc'b'gh &amp; Whitby)


Douglas-Home, Rt. Hn. Sir Alec
Lambton, Antony
Shelton, William (Clapham)


Drayson, G. B.
Lane, David
Simeons, Charles


Dykes, Hugh
Langford-Holt, Sir John
Sinclair, Sir George


Eden, Sir John
Legge-Bourke, Sir Harry
Skeet, T. H. H.


Elliot, Capt. Walter (Carshalton)
Le Marchant, Spencer
Smith, Dudley (W'wick &amp; L'mington)


Elliott, R. W. (N'c'tle-upon-Tyne. N.)
Lewis, Kenneth (Rutland)
Soref, Harold


Eyre, Reginald
Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Speed, Keith


Farr, John
Longden, Gilbert
Spence, John


Fenner, Mrs. Peggy
Loveridge, John
Sproat, lain


Fidler, Michael
Luce, R. N.
Stainton, Keith


Finsberg, Geoffrey (Hampstead)
McAdden, Sir Stephen
Stanbrook, Ivor


Fisher, Nigel (Surbiton)
MacArthur, Ian
Steel, David


Fletcher-Cooke, Charles
McCrindle, R. A.
Stewart-Smith, D. G. (Belper)


Fookes, Miss Janet
McLaren, Martin
Stodart, Anthony (Edinburgh, W.)


Fortescue, Tim
Maclean, Sir Fitzroy
Stoddart-Scott, Col. Sir M.


Fowler, Norman
Macmillan, Maurice (Farnham)
Stokes, John




Stuttaford, Dr. Tom
Tugendhat, Christopher
Wiggin, Jerry


Sutcliffe, John
Turton, Rt. Hn. R. H.
Wilkinson, John


Taylor, Sir Charles (Eastbourne)
van Straubenzee, W. n.
Wolrige-Gordon, Patrick


Taylor, Edward M. (G'gow, Cathcart)
Vaughan, Dr. Gerard
Wood, Rt. Hn. Richard


Taylor, Frank (Moss Side)
Vickers, Dame Joan
Woodhouse, Hn. Christopher


Tebbit, Norman
Waddington, David
Woodnutt, Mark


Temple, John M.
Walder, David (Clitheroe)
Worsley, Marcus


Thatcher, Rt. Hn. Mrs. Margaret
Walker-Smith, Rt. Hn. Sir Derek
Wylie, Rt. Hn. N. R.


Thomas, John Strattling (Monmouth)
Walters, Dennis
Younger, Hn. George


Thompson, Sir Richard (Croydon, S.)
Ward, Dame Irene



Thorpe, Rt. Hn. Jeremy
Warren, Kenneth
TELLERS FOR THE AYES:


Tilney, John
Weatherill, Bernard
Mr. Jasper More and


Trafford, Dr. Anthony
White, Roger (Gravesend)
Mr. Hector Monro.


Trew, Peter
Whitelaw, Rt. Hn. William





NOES


Abse, Leo
Golding, John
Mahon, Simon (Bootle)


Albu, Austen
Gordon Walker, Rt. Hn P. C.
Mallalieu, J. P. W. (Huddersfield, E.)


Allaun, Frank (Salford, E.)
Grant, George (Morpeth)
Marks, Kenneth


Archer, Peter (Rowley Regis)
Grant, John D. (Islington, E.)
Marquand, David


Armstrong, Ernest
Griffiths, Eddie (Brightside)
Marsden, F.


Ashton, Joe
Gunter, Rt. Hn R. J.
Mason, Rt. Hn. Roy


Atkinson, Norman
Hamilton, William (Fife, W.)
Mayhew, Christopher


Bagier, Gordon A. T.
Hamling, William
Meacher, Michael


Barnett, Joel
Hannan, William (G'gow, Maryhill)
Mellish, Rt. Hn. Robert


Beaney, Alan
Hardy, Peter
Mendelson, John


Bennett, James (Glasgow, Bridgeton)
Harper, Joseph
Mikardo, Ian


Bidwell, Sydney
Harrison, Walter (Wakefield)
Millan, Bruce


Blenkinsop, Arthur
Hart, Rt. Hn. Judith
Milne, Edward (Blyth)


Boardman, H. (Leigh)
Heffer, Eric S.
Molloy, William


Booth, Albert
Horam, John
Morgan, Elystan (Cardiganshire)


Boyden, James (Bishop Auckland)
Houghton, Rt. Hn. Douglas
Morris, Alfred (Wythenshawe)


Bradley, Tom
Huckfield, Leslie
Mulley, Rt. Hn. Frederick


Brown, Hugh D. (G'gow, Provan)
Hughes, Rt. Hn. Cledwyn (Anglesey)
Murray, Ronald King


Brown, Ronald (Shoreditch &amp; F'bury)
Hughes, Mark (Durham)
Ogden, Eric


Buchan, Norman
Hughes, Robert (Aberdeen, N.)
O'Halloran, Michael


Buchanan, Richard (G'gow, Sp'burn)
Hughes, Roy (Newport)
O'Malley, Brian


Butler, Mrs. Joyce (Wood Green)
Hunter, Adam
Oram, Bert


Callaghan, Rt. Hn. James
Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Orbach, Maurice


Campbell, I. (Dunbartonshire, W.)
Janner, Greville
Orme, Stanley


Carmichael, Neil
Jay, Rt. Hn. Douglas
Oswald, Thomas


Carter-Jones, Lewis (Eccles)
Jeger, Mrs. Lena (H'b'n &amp; St. P' cras, S.)
Owen, Dr. David (Plymouth, Sutton)


Castle, Rt. Hn. Barbara
Jenkins, Hugh (Putney)
Paget, R. T.


Clark, David (Colne Valley)
Jenkins, Rt. Hn. Roy (Stechford)
Palmer, Arthur


Concannon, J. D.
John, Brynmor
Pannell, Rt. Hn. Charles


Conlan, Bernard
Johnson, Carol (Lewisham, S.)
Parker, John (Dagenham)


Corbet, Mrs. Freda
Johnson, James (K'ston-on-Hull, W.)
Parry, Robert (Liverpool, Exchange)


Cox, Thomas (Wandsworth, C.)
Jones, Barry (Flint, E.)
Pavitt, Laurie


Crawshaw, Richard
Jones, Dan (Burnley)
Peart, Rt. Hn. Fred


Cronin, John
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Pentland, Norman


Crossman, Rt. Hn. Richard
Jones, Gwynoro (Carmarthen)
Prentice, Rt. Hn. Reg.


Dalyell, Tam
Jones, T. Alec (Rhondda, W.)
Price, J. T. (Westhoughton)


Darling, Rt. Hn. George
Judd, Frank
Price, William (Rugby)


Davidson, Arthur
Kaufman, Gerald
Probert, Arthur


Davies, Denzil (Llanelly)
Kelley, Richard
Rankin, John


Davies, G. Elfed (Rhondda, E.)
Kerr, Russell
Reed, D. (Sedgefield)


Davies, Ifor (Gower)
Kinnock, Neil
Rees, Merlyn (Leeds, S.)


Davis, Clinton (Hackney, C.)
Lambie, David
Rhodes, Geoffrey


Deakins, Eric
Lamond, James
Richard, Ivor


Delargy, H. J.
Latham, Arthur
Roberts, Albert (Normanton)


Dell, Rt. Hn. Edmund
Lawson, George
Roberts. Rt. Hn. Goronwy (Caernarvon)


Dempsey, James
Leadbitter, Ted
Robertson, John (Paisley)


Doig, Peter
Lee, Rt. Hn. Frederick
Roderick, Caerwyn E. (Br'c'n &amp; R'dnor)


Douglas, Dick (Stirlingshire, E.)
Leonard, Dick
Roper, John


Douglas-Mann, Bruce
Lestor, Miss Joan
Rose, Paul B.


Driberg, Tom
Lever, Rt. Hn. Harold
Ross, Rt. Hn. William (Kilmarnock)


Dunnett, Jack
Lewis, Arthur (W. Ham N.)
Sheldon, Robert (Ashton-under-Lyne)


Eadie, Alex
Lewis, Ron (Carlisle)
Shore, Rt. Hn. Peter (Stepney)


Edwards, Robert (Bilston)
Lipton, Marcus
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)


Edwards, William (Merioneth)
Loughlin, Charles
Short, Mrs. Renée (W'hampton, N. E.)


Ellis, Tom
Lyon, Alexander W. (York)
Silkin, Rt. Hn. John (Deptford)


English, Michael
Lyons, Edward (Bradford, E.)
Silkin, Hn. S. C. (Dulwich)


Evans, Fred
Mabon, Dr. J. Dickson
Sillars, James


Fernyhough, Rt. Hn. E.
McBride, Neil
Silverman, Julius


Fletcher, Raymond (Ilkeston)
McCartney, Hugh
Skinner, Dennis


Foot, Michael
McElhone, Frank
Small, William


Ford, Ben
McGuire, Michael
Smith, John (Lanarkshire, N.)


Forrester, John
Mackenzie, Gregor
Spearing, Nigel


Fraser, John (Norwood)
Mackie, John
Spriggs, Leslie


Freeson, Reginald
Mackintosh, John P.
Stallard, A. W.


Galpern, Sir Myer
Maclennan, Robert
Stoddart, David (Swindon)


Gilbert, Dr. John
McMillan, Tom (Glasgow, C.)
Stonehouse, Rt. Hn. John







Strang, Gavin
Tuck, Raphael
Willey, Rt. Hn. Frederick


Strauss, Rt. Hn. G. R.
Varley, Eric G.
Williams, Alan (Swansea, W.)


Summerskill, Hn. Dr. Shirley
Wainwright, Edwin
Williams, W. T. (Warrington)


Swain, Thomas
Walden, Brian (B'm'ham, All Saints)
Wilson, Alexander (Hamilton)


Taverne, Dick
Walker, Harold (Doncaster)
Woof, Robert


Thomas, Jeffrey (Abertillery)
Watkins, David



Thomson, Rt. Hn. G. (Dundee, E.)
Weitzman, David
TELLERS FOR THE NOES:


Tinn, James
Wells, William (Walsall, N.)
Mr. Donald Coleman and


Tomney, Frank
White, James (Glasgow, Pollok)
Mr. Alan Fitch.


Torney, Tom
Whitehead, Phillip

Resolved,
That this House endorses Her Majesty's Government's decision to undertake thorough-

going reviews of the financial performance of the British Steel Corporation and of the structure and future development of the British Steel Industry.

Orders of the Day — NATIONAL INSURANCE (MARRIED WOMEN)

10.23 p.m.

The Under-Secretary of State for Health and Social Security (Mr. Paul Dean): I beg to move,
That the National Insurance (Married Women) Amendment Regulations, 1971, a draft of which was laid before this House on 20th April, be approved.
The purpose of these Amendment Regulations is to improve the retirement conditions for women whose marriages have been dissolved. It is proposed that the Regulations should come into operation on 14th June, 1971, which will be in time to help cases arising from the Divorce Reform Act, 1970.
A married woman usually relies on her husband's insurance to give her a retirement pension, but if she is divorced she can use her former husband's insurance only insofar as special provisions in the National Insurance (Married Women) Regulations enable her to do so. It might be helpful to the House if I first explain briefly what these provisions are.
If the woman is over 60 when she is divorced she can qualify immediately for a retirement pension on her former husband's insurance equal to that she would have received if he had died on the date the marriage ended—in other words, she is fully covered.

Mr. Brian O'Malley: In the case quoted by the hon. Gentleman, is the husband under the age of 65?

Mr. Dean: It would apply in any event. If she is over 60 she is fully covered whatever the age of her former husband.
The more usual case is that of the woman who is under 60 when she is divorced. She is required to pay contributions, as any single person is, according to whether she is working for an employer, is self-employed or is non-employed. When she reaches age 60, the rate of retirement pension to which she will be entitled will then depend on her yearly average of contributions. These will be based on contributions paid by her or credited to her in the periods before marriage and after divorce. For the period of marriage, she may, if it is to her advantage, as it usually is, count

her former husband's contributions. In the ordinary course, where the woman works before marriage and after divorce and the husband has a good insurance record, this arrangement should ensure a full retirement pension.
The draft Regulations, while preserving the present position, make the additional provision that her former husband's record may, alternatively, be used for the whole of the period over which her yearly average is calculated up to the end of the marriage, if that would enable her to receive a still higher pension. His record can accordingly cover her for the period of any earlier marriage when she did not herself have to pay contributions.
I give the House this example. A woman who has been widowed or divorced may marry again in her 40s or 50s and quickly find that she has made a mistake. If she then divorces that second husband, as the Regulations now stand she can, for retirement pension purposes, use her second husband's contribution record to cover only the short period of that second marriage. There may well be an extensive gap in her insurance record during her first marriage. These amending Regulations will allow her to use the second husband's insurance to improve her record for the whole period up to the second marriage.
As the Explanatory Note to the Regulations makes clear, this extension brings the provision into line with those which apply to widows. A preliminary draft of the Regulations has been submitted to the National Insurance Advisory Committee, which recommends that they be accepted.
I apologise for that rather technical explanation, but I commend to the House this improvement in National Insurance cover for women who, everyone will agree, deserve our sympathy and our help.

Mr. Charles Curran: Can my hon. Friend say how many women will benefit?

Mr. Dean: I am not able to help my hon. Friend there because it depends largely, especially for the future, on how many women are likely to be in this position, but I can tell him that the proposed improvement will largely help those women who are in the unfortunate position of having had two marriages, both of which have broken down. There will


probably be more of these under the recent reform in our divorce laws.

10.28 p.m.

Mr. Brian O'Malley: We welcome these amending Regulations, first, because they mirror almost exactly the proposals which the previous Government put forward in their White Paper Cmnd. 3883, which were reflected in Clause 23(5) of the National Superannuation Bill, and second, because we feel, as the hon. Gentleman does and as the public will feel, I am sure, that they may considerably assist divorced women and women whose marriages have been annulled.
It is significant that the National Insurance Advisory Committee received no representations when the draft Regulations were published. This is not surprising, for everyone interested in this small corner of national insurance and social security cover will feel that they bring a welcome, if minor, change in the Regulations as they stand at present. Under present legislation, divorced women cannot substitute their ex-husband's record for any period between their own school leaving age and their marriage, as, for example, widows can, I understand. Now for the whole period both widows and divorced women can use their ex-husband's contribution record for the whole period to the end of their marriage. This will be useful to women who have, for whatever reason, a brief second marriage. There will now be National Insurance contribution cover over the whole period of the first marriage, whether it has been lengthy or short. In addition, it will be particularly helpful to women who married late, who may well have stayed at home to look after aged relatives and had no contribution record of their own.
The hon. Gentleman explained the position of women who were divorced over the age of 60. The House was pleased that even though the ex-husband might not be of pension age himself—65 years—the woman divorced over the age of 60 will be able to draw a retirement pension if necessary before the ex-husband reaches 65, which is the normal age at which a married woman would be able to draw funds from her husband's contributions.
As I understand the situation as described by the noble Lord, Lord Aberdare,

in another place on 5th May, as reported at columns 422–423 of the OFFICIAL REPORT, House of Lords, the Regulations deal only with the flat rate pension. It may well be, for example that the ex-husband has paid graduated contributions for a number of years under what we on this side describe—I say this without venom tonight—as the Mark I Tory graduated swindle. I understand that if a widow's late husband has paid graduated contributions she not only receives flat rate pension but increments on top arising from the contributions of her late husband into the graduated State system. Why should not the divorced woman receive recognition of the payments her ex-husband has made in graduated contributions, particularly if he has died in the interim and has left no widow who would otherwise be drawing the benefits of those contributions? The Regulations help a woman if she has had a short second marriage, because now she will be able to use the whole of her second husband's record.
I do not want the hon. Gentleman to think that I am quibbling, but because of the inevitable complications of any National Insurance scheme there will always be cases where individual women will be badly affected because of the individual contribution records of their ex-husbands. The second husband might not have had a good contribution record and the woman who has divorced or been divorced by the second husband might well have had a very long marriage to her first husband who had a good contribution record. I recognise all the difficulties and complexities which can arise in a National Insurance scheme such as ours, but does not the hon. Gentleman think that in some circumstances it might be justifiable to consider the contribution record of the first husband rather than the second to help women who have had a brief second marriage and their second husbands had a poor or non-existent contribution record?
My noble Friend Baroness Phillips, in another place, asked a question of the noble Lord, Lord Aberdare. She said:
I understand the Regulations to prescribe the yearly average contribution over the lifetime of the husband. This in fact is different from the widow's pension which appears to be based on the yearly contribution for the last three years before death. I do not expect an answer immediately, but perhaps this is something where, when we come to discuss pensions


totally, we may find there is some slight anomaly which can be ironed out".—[OFFICIAL REPORT, House of Lords, 5th May, 1971; Vol. 318, c. 424.]
I know that the scheme as it exists for widows gives a number of options in order that the widow can get the highest possible pension according to how the contribution record is calculated. I should be grateful if the Under-Secretary would comment on my noble Friend's question.
I proposed to ask the Under-Secretary what numbers of divorced women would be helped by the Regulations, but he rightly pointed out that it would depend on the divorce rate arising from recent legislation on the subject. However, it may be that I have misunderstood the transitory provisions in Regulation 3 of the Statutory Instrument. I understand that divorced women will not receive any increase in the amount of benefit in respect of any period before the coming into operation of the Regulations on 14th June, 1971, but I was under the impression that women whose marriage, in the terms of the Regulation,
was terminated before the date of the coming into operation of these Regulations".
could conceivably find in some numbers that their retirement pension was increased as a result of the new basis of calculation. If I am correct in my interpretation, perhaps the Under-Secretary would give us the figures.
We welcome this minor improvement in what we regard as a generally unsatisfactory National Insurance scheme. But that does not alter the fact that married women who work and choose to pay their contribution get a poor return on their contributions when they are taken with the contributions of their ex-husbands. While in 1931 fewer than 500,000 married women were employed, that figure had jumped to 2½ million by 1951. Now it is probably approaching 5 million. Under the present National Insurance scheme, married women who work for a considerable period of their working lives—and the number may well include a considerable number of women who are divorced—get a poor deal. When we introduced our National Superannuation Bill, we sought so to change the basic National Insurance system and the principles underlying it that for the first time in the history of this country married women who worked

would get a fair deal and return from it. Therefore, while welcoming these proposals, which, after all, are proposals put forward by the previous Government, I am bound to say that these are only minor proposals. We have to ask the question, when are the present Government going to bring forward their proposals which will give full justice to these women, as we wished to do? There is no sign of that yet.

10.40 p.m.

Mr. Charles Curran: I welcome these proposals, of course. I do not think so meanly of them as the hon. Member for Rotherham (Mr. O'Malley) does. Nor will the women who will benefit by them take the lofty view that he has been taking; they will welcome them with a good deal more enthusiasm than he has done.
However, I would ask my hon. Friend the Under-Secretary whether it is possible for him to give us any idea of his thinking about the future of National Insurance as it affects married women. I know that it is a very large subject, but I think we are entitled to raise it in this debate, and I should like to see whether I can persuade my hon. Friend to open his mind to us on what is really a basic question. Should a married woman's right to pension depend upon her husband's contributions record, or upon her ex-husband's contributions record either?
I am surprised that we have not had a few members of the Women's Liberation here for this debate, because this seems to me to be a question on which women's organisations would be likely to be more vocal than they are. In National Insurance we treat wives as appendages of their husbands, and as persons whose rights are dependent not on what they themselves do but on what their husbands do, or fail to do. I am familiar, and I am sure other hon. Members are familiar, with the case of a married woman finding that when she reaches pensionable age she does not get the pension she hoped to get, because there was something the matter with her husband's contribution record.

Mr. Deputy Speaker (Miss Harvie Anderson): Order. I hope very much that the hon. Member will confine himself to the Regulations, and not encourage his hon. Friend to stray equally far from them.

Mr. Curran: I accept that Ruling, of course. I did not want to do more than touch parenthetically upon the question in the hope that my hon. Friend, when he replies, could give us some idea of his thinking about this. Because he understands the National Insurance subject thoroughly, he does not need me to convince him that this is a basic question that I am asking him to answer, and I ask him to open his mind on it.

10.43 p.m.

Mr. Dean: With the leave of the House, perhaps I may briefly try to answer some of the questions put to me without getting out of order.
The position with regard to the graduated contribution is that the woman who is over the age of 60 will be entitled to half her husband's graduated pension. But this is not so in the case of a woman who is under 60.
With regard to the transitional Regulation, Regulation 3, the new Regulation that we are speaking about provides that there shall not be an increase in the amount payable to a woman whose marriage was dissolved before the Regulations for any period before that date.
With regard to the contribution point which the hon. Member for Rotherham (Mr. O'Malley) put to me, the position is that for both the flat-rate retirement pension and widow's benefit there are two conditions which must be satisfied in relation to the insurance record on which the benefit is based. The first is that at least 156 flat-rate contributions of any class must have been paid since the person last entered insurance. The second is as that for benefit to be paid at the standard rate there must be an average of 50 flat-rate contributions for each year of insurance. For the purpose of this condition full contributions paid and credited can be counted. Widow's pension was at one time related to the last three years of insurance under the Contributory Pensions Acts. That system ceased to operate in 1948 when the present National Insurance scheme came into force. Therefore, the point to which the hon. Member's noble Friend in another place referred to no longer obtains.
The final question I was asked by my hon. Friend the Member for Uxbridge (Mr. Curran), and that was about opening my mind as to the future of married

women in National Insurance. It is clear from what you have already said, Mr. Deputy Speaker, that I must proceed cautiously in this, so I had better content myself, in order not to incur your displeasure, by asking hon. Members to exercise patience a little longer until we produce our plans.

Question put and agreed to.

Resolved,
That the National Insurance (Married Women) Amendment Regulations 1971, a draft of which was laid before this House on 20th April, be approved.

Orders of the Day — NATIONAL INSURANCE ACT, 1966 (SECTION 3(1))

10.45 p.m.

The Under-Secretary of State for Health and Social Security (Mr. Paul Dean): I beg to move,
That the National Insurance Act 1966 (Commencement No. 3) Order 1971, a draft of which was laid before this House on 6th May, be approved.
This change was provided for in legislation of the previous Government in 1966. They carried out part of their intention in that year, and this Commencement Order completes it.
Section 3(1) of the National Insurance Act, 1966, introduced a rule which provided for payment of unemployment benefit after the first six days of suspension by an employer this commonly being called the six-day suspension rule. It applies to earnings-related supplement from October, 1966, and was to have applied to flat-rate benefit from March, 1969, but that was postponed to allow progress towards a guaranteed pay scheme.
This Order brings that rule into operation for flat-rate benefit from 1st January, 1972, more than five years after the original announcement. The effect is that at present flat-rate benefit is payable not only to workers who have lost their jobs, but to those on short time, employed less than a full working week or temporarily suspended by their employers. When the six-day suspension rule is applied, benefit will not be payable for short periods of suspension not exceeding six days, nor for the first six days of longer periods. This brings the flat rate into line for short time and temporary lay-off. Since the Government announced


the change, a good deal of progress has been made towards guaranteed payments in industries subject to lay-off, including one of the main industries affected—the motor car industry.
The Government do not propose any system of statutory guarantee payments, but welcome voluntary agreements freely negotiated between employers and employees in an industry and tailored to the needs of that industry, and much progress has been made in this since the previous Administration announced these proposals.
The main reason why we have put this proposal forward today, against that background, is that we feel that there has been a misuse of the National Insurance scheme. It has been a subsidy from the scheme for short-time working, not for unemployment, while unemployment benefit is intended for people who have lost their job and are looking for another. It is unfair to contributors that they should have to subsidise the scheme in this way. This includes low wage earners in regular employment, while many of the people getting these subsidies from the scheme at present tend to be in the higher earning ranges, as in the car industry where earnings average £30 a week.
Another factor is that in employment exchanges much work is involved which should be devoted to administering unemployment benefit and assisting people in getting jobs. We estimate that there will be a saving of about 300 staff and about £3 million a year as a result of this change.
There will be safeguards. I emphasise that the Order does not affect unemployment benefit for people who have lost their jobs and are seeking other jobs. For those in need who are not covered by guarantee payment arrangements, supplementary benefit will be available. To summarise, this is a saving in non-priority expenditure so as to spend more where the need is greatest.

10.50 p.m.

Mr. W. H. K. Baker: I oppose the Order on one rather narrow ground; that is, as it applies to share fishermen. It may help the House if I explain why I feel this and exactly what share fishermen are.
All share fishermen are treated as self-employed; they are partners in a joint venture and are remunerated wholly by their share in the joint venture. There is absolutely no employer/employee relationship in the inshore industry where share fishermen operate. Share fishermen are exclusive to the inshore fleet, which is scattered along the coasts of the United Kingdom, notably on the north-east, east and west coasts of Scotland, certain parts of the east and north-west coasts of England and in South-West England. A total of possibly 17,000 people in the fishing industry will be affected by the Order, and the amount of unemployment benefit paid had the Order not come before the House would not be great.
All these men pay class 1 insurance. Not only do they pay their own share, but they pay the whole stamp. Under the Statutory Instrument which gave effect to that Part of the Act which makes share fishermen entitled to receive unemployment benefit. National Insurance leaflet No. 47 of March, 1970, says in paragraph 7:
… your share of the stamps may be deducted either from the gross earnings or from your share in the proceeds. Where this is done your card will normally be stamped at each share-out for the period … If the profits or gross earnings on one voyage do not cover the cost of the stamps … the stamps can be paid for out of the proceeds of the next voyage.
Generally speaking, when the catch is sold, 50 per cent. of the proceeds of sale go to the boat—that is known as the boat's share—and the remainder is shared out equally among members of the crew. The average crew is five or six men. The boat's share goes to paying for loans from the White Fish Authority or banks for the purchase of the boat, electronic gear, new and replacement parts of fishing gear and the general overhead running costs of the boat. The basic rule is "no cash, no share"; that is to say, no remuneration. There is virtually no unemployment among share fishermen; indeed at times it is difficult to find adequate crews. If this Order becomes effective for share fishermen, it will make the crewing situation even worse.
Equally, there is no redundancy in the inshore fleets in Which share fishermen operate. The redundancy payments contributions are repaid to share fishermen,


and paragraph 8 of the pamphlet to which I have referred mentions that. It says:
… share fishermen are excluded from the scheme (and) arrangements have been made by the Department of Employment and Productivity to refund annually
the amounts paid in under that scheme.
Remuneration for share fishermen is available only if the boats put to sea and if they have caught, landed and sold their catch. If there is no catch, there is no cash. The only unemployment which exists is if the boat can put to sea. If the boat cannot put to sea, there is no employment.
My hon. Friend referred to arrangements which have been made in various industries whereby agreement has been made between workers and management for payment to a certain extent during lay-off periods—suspension periods. This is not possible in the fishing industries, because there is no fall-back money where this can be done. The proceeds of catches are shared, 50 per cent. to the boat and 50 per cent. to the crew.
Other than for rare mechanical failure, the only reason for boats not being able to put to sea is adverse weather conditions. Gales and high seas are not in the control of the skipper, and it is his decision whether to hazard the boat and the lives of his crew. It is pertinent to point out that the highest accident and death rate in any industry in the United Kingdom is that which comes, unfortunately, into the inshore fishing fleet.
Statutory provision was made for share fishermen to receive unemployment benefit in Section 100 of the National Insurance Act, 1965, and it was give effect specifically by Statutory Instrument No. 386 of 1967. The share fisherman is mentioned specifically in this respect. The new rule to govern the payment of unemployment benefit to workers is not "terminated" but is "suspended" by the employer. I understand from the original Explanatory Memorandum when this Statutory Instrument was first issued that it could not possibly apply to share fishermen. The employer-employee relationship does not exist, as I have pointed out.
I want to refer to two or three other points in the leaflet NI.47 which help make my case. There are three additional rules for benefit which apply to share fishermen. The first is:

… benefit would not be payable for any day on which you were out with the vessel, even though your fishing was unsuccessful." It is saying, in other words, that benefit is available if the boat is not at sea for any reason.
The second is:
So far as fishing from a vessel is concerned, you must show that you were unable to engage in any type of fishing for which the vessel could reasonably be used in any area to which the vessel could reasonably go.
I take that to mean that the man must have been available for employment had any boat in his port been being put to sea.
The third is:
If you are the skipper or a member of the crew of a fishing vessel … you must also prove there was a good reason for not having fished on the day for which you are claiming benefit. Good reason might be bad weather, absence of fish … or the repair or reconditioning of the vessel (other than routine or period maintenance work …)",
which, of course, the share fisherman must carry out in the interests of the joint venture of which he is a member.
Unemployment benefit has been available to these men for a considerable time. If suspension is due to bad weather it is unlikely that it will hit all the regions at the same time. It is more likely to hit the south-west of England and leave the north-east of Scotland free, or vice versa.
Therefore, overall I am asking for a quite small thing from the Government; namely, that the Department of Health and Social Security should recognise the right of share fishermen to unemployment benefit. I would ask my hon. Friend to look closely at the position and, having done so, to take steps to exempt share fishermen from this Order in the interests of the fishermen themselves and of the nation as a whole.

11.2 p.m.

Mr. Hugh D. Brown: I congratulate the hon. Member for Banff (Mr. W. H. K. Baker) on his new-found interest in National Insurance regulations. However, I do not expect him to get much "joy" from the Government. If the regulations concerning married women are difficult to understand, the provisions relating to share fishermen are even worse. I do not think this is the main reason why the Government are attacking the unemployed, but it certainly looks like it.
The Under-Secretary in introducing the Order kept appealing to hon. Members on his own side for support. However, he failed to convince me with his arguments, and certainly did not provide the House with any information. May we be told where this abuse is taking place? Is it among dockers, or in the car industry, or where? Is there said to be any collusion between employers and employees? This is an essential point, and the hon. Gentleman has given us no information. Surely if somebody, through no fault of his own, finds himself unable to work and earn on that day, then, provided that other things are acceptable, he should be entitled to unemployment benefit. In the provision of unemployment benefit there does not need to be the suggestion of somebody having lost his job. That would be a new concept of the conditions for such benefit.
Perhaps we can be given examples to show how the system is to work. The hon. Gentleman should not on the one hand say that this is something peculiar to the car industry, with average earnings of £30 a week, and then suggest that if the man were off for two days a week he would be nowhere near the supplementary benefit level. If he lost only two days on earnings of £30 a week, I am sure that that would not take him anywhere near the level for such benefit.

Mr. Dean: I was not saying that that was the only industry affected. I quoted it as an example of an industry where this is most likely to occur because it is an industry that is prone to lay-offs.

Mr. Brown: The hon. Gentleman is still not giving us any information. Why quote average earnings of £30 in the car industry? Is that an industry in which this practice is prevalent? We are surely entitled to more information. If a man is sick for one or two days in a week, he could in certain circumstances get sickness benefit. Why should we introduce the concept that because he is unemployed through no fault of his own, it is not genuine because it is not long term?
I am surprised at the little interest in this point. This is certainly a matter of great concern to numbers of workers who are afflicted with this regularly—like share fishermen. There are a number of industries where this is common practice, and the Minister has never said that there has been any discussion with trade unions

or the T.U.C. This is rather a shabby little Order.

11.6 p.m.

Mr. Brian O'Malley: I am grateful to my hon. Friend the Member for Glasgow, Provan (Mr. Hugh D. Brown) and the hon. Member for Banff (Mr. W. H. K. Baker) for ensuring that this is not just a brief exchange between the Front Benches.
I had never heard of the problems of share fishermen before I went into the Department of Health and Social Security—where they seem to be perennial. One always seemed to be considering one aspect or another of the problem of people who I assume are among the constituents of the hon. Member for Banff.
We are not opposed to this change in principle, provided that certain conditions are satisfied. It is because these conditions are not at present satisfied that my hon. Friend the Member for Provan reflects the concern which would be felt in industries where short-time working is sometimes endemic and at best is something to be expected at least during given recurrent periods. It is on the conditions which I mentioned and the Government's intentions that I seek clarification. The history of this proposal goes back to 1965. Section 20(1)(c) of the National Insurance Act, 1966, says:
… 'day of interruption of employment' means a day which is a day of unemployment or of incapacity for work.
Paragraph (d) says:
any two days of interruption of employment, whether consecutive or not, within a period of six consecutive days shall be treated as a period of interruption of employment, and any two such periods not separated by a period of more than thirteen weeks shall be treated as one period of interruption of employment.
So, reduced to its simplest, the situation is that a number of men who have been on shortened working weeks and short-time working have been drawing unemployment benefit once they have passed through the three waiting days within a period of 13 weeks. It is true that there have been examples over the years, although few, of abuses of the system.
A couple of months ago there was newspaper publicity of what could clearly be argued was abuse. We are certainly not taking the side of, or attempting to defend, that small number of people who


have attempted or might attempt to abuse the operation of the system over the years. Indeed, we take the view that generally men claiming unemployment benefit as the result of short-time working at their place of employment have been hit by this financially, because their families often need financial help of one kind or another, particularly in a period like 1971 when we have soaring prices and an unacceptable degree of inflation. We would not regard that as abuse. I hesitate to use the word "misuse" of the system, but, as it has grown, men have understandably and properly learned to depend on National Insurance when they have been on short-time working.
In 1966 the Labour Government reviewed the situation and came to the conclusion that three years after the passing of the 1966 Act—namely, March, 1969—where the contributor's employment was not terminated but suspended by the employer a day should not be treated as a day of unemployment until the seventh or later days in a continuous period of suspension. It was a case not merely of saying that there will be six waiting days instead of three waiting days, but that the whole system set out in Section 20(1)(d) was changed and that the only people who would draw benefits, even after the expiry of the six waiting days, as it were, would be those who were not merely working, say, a three-day week but were unemployed consistently over a longer period than six days. I am talking of a continuous period without any allowances for interruption of employment.
The result of that proposal, which was to come into operation in March, 1969, was that generally the short-time worker would no longer be able to get unemployment benefit. Unemployment benefit would be payable where men were laid off for a period longer than six working days. This could particularly apply to people in a strike situation not disqualified under Section 10(1) of the Act but entitled to unemployment benefit and able to draw it after the first six days of being laid off because of a strike situation.
As this situation will now come into effect as a result of the Order, it is time for the Government to do something about implementing the changes in grade or class provisions about which Donovan

talked. I am sure that the hon. Gentleman does not disagree with the Donovan recommendations. I suggest that the sooner these are implemented the better. This is merely another example and reason why they should be so implemented.
In 1966 the Labour Government proposed that this practice, for which an appointed day has been set tonight, should come into operation in March, 1969. Chapter 4 of the National Insurance Act, 1969, replaced the provisions of the 1966 Act. Instead of the three-year provision it set an appointed day. It was further delaying the introduction of the principles which are today issued by this Statutory Instrument. The House should examine briefly the reasons why the Labour Government acted as they did——

Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will keep strictly to the terms of the Order. He is getting a little beyond it.

Mr. O'Malley: This is relevant to a number of questions that I want to ask. The proposals which will come into operation as a result of this Order arise from legislation enacted in 1966. The view taken then was that the responsibility for the payment of loss of earnings for short periods of suspension was with the employer rather than with the National Insurance system and that the system should not be used for these purposes. In this period the then Government had been seeking voluntary agreements and discussing the question of statutory schemes to provide such cover for workers and such agreements between employers and employees.
Before letting this Order through I must ask the Minister whether he is satisfied that the date he has set, 1st January, 1972, is right. He pointed out that there has been an extension in the number of voluntary agreements and payments for workers laid off. He mentioned the motor industry, and I could mention at least some substantial sections of the steel industry. What kind of numbers are covered by such voluntary agreements? We ought to know how many people are on short-time working at present and what will be the likely situation when these Regulations come into effect. Thirdly, we would like to know whether


the hon. Gentleman has consulted the T.U.C. and the C.B.I., and what the result of those consultations has been.
We are in a period of unacceptably high unemployment levels and a high level of short-time working, and it is conceivable that the problems of short-time working and the financial deprivation arising from it could get far worse before they begin to get better. This House has a responsibility towards workers who may well be affected in this way. They are not all people earning £35 or £45 a week. Some of the lowest-paid workers in the country can be affected adversely by this Order. We do not oppose it now, but we expect that between now and 1st January, 1972, the Government will take urgent steps to assist wherever they can the introduction of voluntary agreements between trade unions and employers and, secondly, that——

Mr. W. H. K. Baker: Would the hon. Gentleman care to reinforce my point that such agreements are impossible for share fishermen?

Mr. O'Malley: I recognise the peculiar difficulties which share fishermen face, and I hope that the Under-Secretary will look at this problem with more sympathy than the present Government look at many of the propositions which we on this side of the House put forward. The hon. Member has made a serious point which deserves consideration.
We want the Government to extend the area of such agreements and the area of coverage before the introduction of the proposals contained in the Order, in January, 1972. While we are prepared, with reservations, to allow the Order through without dividing, I must tell the hon. Gentleman that if the situation over unemployment and short-time working later becomes as serious as it could be and if there is a situation where large numbers of working people——

The Deputy Speaker: Order. I am sure the hon. Gentleman will realise that he is following the path to which I previously drew his attention.

Mr. O'Malley: I realise that it is a somewhat narrow Statutory Instrument, Mr. Deputy Speaker. I have only two more remarks.

We do not intend to divide the House on the Order, but if it were the situation that many people were adversely affected by it because the Government had not moved in other directions, we should certainly seek time in the House to bring into question again the whole matter of the date from which the Regulations begin to apply.

11.21 p.m.

Mr. Dean: With your leave, Mr. Deputy Speaker, and that of the House, perhaps I may deal briefly with the points raised.
My hon. Friend the Member for Banff (Mr. W. H. K. Baker) asked particularly about the position of share fishermen. When he was describing the problems of share fishermen and the National Insurance categories in which they fall, it was clear to the House that we are dealing with a special category of person—one might almost say a unique category—regarding National Insurance. As my hon. Friend rightly described, they are self-employed, although for National Insurance purposes they are Class I and pay the combined contribution of the employer and the employee.
As my hon. Friend reminded us, this goes back over a considerable period of years in the National Insurance scheme. Before 1948 share fishermen were wholly remunerated by a share in the proceeds of the vessel in which they worked and were excluded from unemployment benefit. After it was accepted that share fishermen should be covered for industrial injuries insurance, there was pressure for them to be treated as employed persons for unemployment benefit purposes. The matter was referred to the National Insurance Advisory Committee, which recommended that they should be brought into Class I for National Insurance provided that certain additional safeguards for benefit purposes were devised. They were brought into insurance by regulations coming into force in 1948, and there were additional tests which the share fishermen had to go through in order to qualify for unemployment benefit.
I recognise that this is a case where, if these people have no cash they have no share-out. I will gladly give the assurance for which my hon. Friend asked; namely, that the Government will consider seriously what he has said regarding


this category of person to see whether it is possible to meet the points which he has put. Although, clearly, I cannot give an absolute undertaking on this matter, I hope that my hon. Friend will feel that what I have said is reassurance to him and to his case.
I am grateful to the hon. Member for Rotherham (Mr. O'Malley) for saying that the Opposition do not intend to oppose the commencing Order. He also made the point that there is some abuse in this area and the possibility of collusion. He answered the points made by the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown). There is, clearly, the possibility of collusion, and this has taken place in some areas. But it is not so much a matter of collusion. The question we ask ourselves in all of our insurance arrangements is whether we are absolutely certain that the large sums of taxpayers' and contributors' money going into the scheme are used to the best effect or whether there are areas of expenditure on benefit which have grown up which are no longer of high priority or that benefit is not being used as originally intended. There is little doubt that these are a group of people who are not unemployed in the normal sense of the word and who are at a moment getting a benefit, and this benefit was not intended for such people.
The hon. Member for Rotherham asked how many people were covered by guaranteed wage schemes. The latest position is that about 10 million workers are so covered. As the hon. Gentleman said, the number is growing, and we assume that it is likely to grow further as a result of the coming into operation of the Order.
The hon. Gentleman asked whether we had consulted the T.U.C. and the C.B.I. We consulted both bodies. It is only fair to the House that I should say that the T.U.C. is not in favour of the proposal. The C.B.I. has no objection to it. It would have had an objection to imposing guaranteed wage schemes in this area. We do not think that this is the right approach. We think that it is much better for these arrangements to be made on a voluntary basis through free negotiation between employers and employees rather than for them to be imposed by the Government of the day.

Mr. O'Malley: I hope that the Under-Secretary will be able to say that the Government will throw whatever weight they think they have behind representations to the employers pointing out that they have a responsibility in this matter. This was the attitude of the then Opposition spokesmen on the subject, including the present Secretary of State. I hope that the Government will tell the C.B.I. clearly that it should be negotiating such agreements.

Mr. Dean: We do not think it would be right to impose statutory agreements on employers and employees. This is a matter which is best left to voluntary arrangements, but, as I have made clear, we welcome voluntary arrangements freely made.

Question put and agreed to.

Resolved,
That the National Insurance Act 1966 (Commencement No. 3) Order 1971, a draft of which was laid before this House on 6th May, be approved.

Orders of the Day — BRITISH BROADCASTING CORPORATION (EXTERNAL SERVICES)

Motion made, and Question proposed. That this House do now adjourn.—[Mr. Monro.]

11.23 p.m.

Mr. Phillip Whitehead: Debates upon the Adjournment have one thing in common with the external broadcasting services which I wish to discuss tonight. Neither can be judged by their impact upon the immediate audience. There is no immediate test of audience reaction. There is that moment of doubt and sometimes despair that nobody may be listening and that nobody perhaps cares. In preparing for this debate I could find no record of a debate on the financing of the external broadcasting services over the last 10 years.
At the outset I declare a marginal interest. It is confined to having worked for the external services of the B.B.C. nine years ago and having been in the employment of B.B.C. Television until about four years ago. During the whole of that period, and indeed since, I formed the conclusion that the unsung heroes of Bush House are not just an ornament of the B.B.C. but are the finest investment


for the expenditure of £12 million annually which Britain could have in the propagation of the British point of view, and not just the British Government's point of view, overseas.
The best testimony in this field is without doubt the Duncan Report, which hon. Members realise was by no means wholly favourable to the B.B.C. external services as they are at present constituted. Paragraph 18 of the report says:
As an instrument of communication, the B.B.C. has the decisive advantage that it has a worldwide reputation for telling the truth. Its overseas broadcast bulletins are therefore widely believed to give true and objective accounts of world events and they provide a sure basis for influential comment.
That, I think, is a fair tribute to the B.B.C., and I am sure that there will be general agreement with it. But the melancholy fact is that since 1950, in terms of broadcasting hours, the B.B.C. has declined from first to fifth place, and if the present rate of decline in relative terms continues we shall shortly be overtaken by Egypt. Nor is it just the big Powers which are expanding and the, so to speak, smaller ex-colonial Powers declining. The Netherlands and other much smaller ex-colonial Powers have expanded their broadcasting services since 1950, in the case of the Netherlands by almost 200 per cent., whereas our relative expansion has been about 20 per cent. In those terms, we have remained almost static, and in real money terms our expenditure on the external services has declined over the last five years.
This is not a party point. I am aware of which Government were in power for most of the past five years. It is my contention that both parties have consistently under-estimated the harm which has been done, and which can be done, by neglect of the external broadcasting services. The present Director-General of the B.B.C. has accused Governments of frantically looking for candle ends of economy without appreciating the light which can be cast by any one candle end if properly used. I agree with that view. Since the virtual disappearance of the Rapp Report some years ago, there has not been a coherent approach to the external broadcasting by either party. This indifference has increased, is increasing, and ought to be diminished.
I shall consider, first, the number of services, and then the question of the

frequencies and transmitters for these services. All hon. Members will have their own anecdotes about audience response to the B.B.C. I shall quote from a letter which, coincidentally, I received this week, by a roundabout route, from a friend in Prague who can no longer correspond with the West except by the occasional smuggled missive like the one I received. I am sure that this testimony will be accepted by hon. Members, including the hon. Member for Ormskirk (Mr. Soref), who is waiting to intervene in the debate, and with whom I agree very little on B.B.C. matters. This is what my friends says:
I am a regular listener to the B.B.C. World Service, but I find it extremely difficult to tune to it because it is beamed to the Middle and Far East, where your friends are, as they keep showing you on every occasion. But what can you do? It is still a newscast, it is fairly reliable, and I just have to listen, even if it is a tough job to get it on the 31 metre band.
There are particular problems of reception in Prague, and especially so in the area where my friend lives. I concede, also, that since 1968 the medium-wave frequencies to Czechoslovakia have been stepped up. But I quote that example of a listener's response, from a man cut off from his friends, often in despair, linked with the outside world and a concept of truth and objective reporting by the B.B.C. on the 31 metre band
I wish to speak tonight, however, about the vernacular services of the B.B.C. rather than about the English language service to which my friend referred in his letter, and I do so because they have come under threat from the Duncan Report. The Duncan Report recommended a cut-back in the vernacular services in favour of English which, the Committee believed, was the lingua franca of the educated èlite in many countries. The Committee said:
We have the impression that a broadcast in the vernacular makes the educated listener, with whom we are dealing here, feel that it is being specially slanted to him, and that he is therefore likely to be that much less receptive. Moreover, foreign language broadcasts are less likely to attract the influential few …
It went on:
In our view the assumptions underlying this review should be that henceforth no foreign language broadcasts should be conducted unless it can positively be shown that they are being listened to regularly by an audience (a) of significant size which would not listen to


English, if the vernacular were not available, (b) consisting of people whom it is particularly important to reach because of the influence which they exert.
I find that an offensive and ill-timed view, which grotesquely under-estimates the pressures of public opinion, particularly in some emerging countries. We must reach beyond the élites and realise that the teenager in many countries today, perhaps with a transistor radio picking up medium-wave transmissions, and perhaps at this time wanting, say, British pop, some news in his own language and, perhaps, some information about world sport and so on, may well become the educated listener of tomorrow. By getting him in his formative years, the B.B.C may well have one of its regular audience for many years to come.
The Duncan Report declined to recommend an increase in Government expenditure on the external services, no doubt confident that the improved transmitters which it recommended would balance cuts in the vernacular services. But I contend that those vernacular services should be improved. Time after time they have been cut just at the wrong moment. We have had no services to much of Western Europe since 1957. Ironically, at the very moment when we were missing the boat at the Messina talks we were also cutting back vernacular services to our friends in Norway, Sweden, Denmark, Holland and Belgium. Today, as our position on Europe and our negotiations with the countries of the E.E.C. are watched with apprehension or hope by our closest friends in both E.F.T.A. and the E.E.C., we are broadcasting only to the English-speaking élite in many of those countries.
It may be contended that all those people speak English anyway, but what about Vietnam, to which we broadcast for three-quarters of an hour each day compared with 12 hours by "The Voice of America"? There is no English-speaking élite there. In so far as it has an élite, it is French-speaking. Yet journalist after journalist has returned from Vietnam to say that the B.B.C. external services are listened to as major sources of news not just by the élite but by villagers in the delta. Last month the little five-minute weekly service on science matters broadcast by the Vietnamese service put on a programme on

the use of new drugs for the treatment of farm animals and poultry, and in the very next mail from Vietnam there were 16 inquiries from Vietnamese farmers in the south about how those drugs could be obtained. That is remarkable testimony to the efficiency of the service, which should certainly be expanded.
Equally, in this troubled time for East Pakistan, when the House has been exhorted by hon. Members on both sides to exert an influence on the civil war there, there is a case for expanding the mere half hour a day we provide in the Bengali service.
In the Middle East, although the Arabic service is one of the great success stories of the B.B.C., and is acknowledged as such in the report, we stopped the Hebrew service in 1968, precisely at the moment when our influence and the British point of view should have been put in the Middle East.
In Africa the Russians now broadcast in 11 vernacular languages, and we are broadcasting in only three. Those who have lived and served in Africa, as I have, no doubt share my astonishment that the Russians have a Fulani service and we do not. The Afrikaans service of the B.B.C. was stopped in 1957, again, ironically, precisely at a mement when our differences with South Africa and the widening gulf between the Governments of Great Britain and South Africa first made it doubly necessary that we should have a service to the Afrikaaner people of South Africa. We do not broadcast at all in any vernacular language to Central and South Africa, south of the Zambesi. This, given the present difficulties with the régime in Rhodesia, is an astonishing omission.
I turn to the question of transmitters. Whilst the general overhaul recommended in the Rapp Report has not been carried out in its entirety, I concede that the picture is brighter here. There is improved power medium-wave transmission to Eastern Europe, and there is the slow conversion of the United Kingdom shortwave transmitters. There are the relay stations on Ascension Island and at Masirah. But still there are the questions of money and speed. The rest of the world is converting, too, and faster. We are losing the race for audibility in the medium-wave band.
At present the B.B.C. does not have the funds properly to programme and to use the relay stations at Masirah and on Ascension Island. The recent White Paper on commercial broadcasting, which we shall be debating on Wednesday, speaks of freeing four medium-frequency wave bands now used by the domestic services. It says:
One of the channels thus freed will be used to augment our external broadcasting services.
That is the only sentence in the pathetic White Paper that I applaud wholeheartedly, but it is not very explicit. Which service will benefit—the service for Eastern Europe or that for Western Europe? I hope that the Minister can tell the House exactly what the service is to be.
I have tried to outline the need to expand our external broadcasting facilities. Does the Foreign and Commonwealth Office accept that a case for expansion of the vernacular services can be made—we are talking not of millions but of perhaps £250,000 a year—or is it wedded to the arguments in the Duncan Report, obsessed with élites and ignoring the masses? Does it accept the need to accelerate the modernisation of transmitters and, particularly, to transmit to that transistorised medium-wave audience which has exploded all over the developing world in the last 10 years?
I am sure that when we talk about the need for expansion we should turn our back on the Duncan Report, which suggested that while every other country is expanding its vernacular services we should be cutting ours. There is an enormous audience and enormous good will all over the world among those listeners to the B.B.C. who know that truth is the best and only propaganda.

11.41 p.m.

Mr. Harold Soref: I am extremely grateful to you, Mr. Deputy Speaker, and to the generosity of the hon. Member for Derby, North (Mr. Whitehead) for making time available for me to intervene in this debate, however briefly.
This is the first time, certainly in this Parliament, that it has been possible to discuss the B.B.C. in abstract or its overseas work. Nobody would doubt that the war record of the B.B.C. was un-

surpassed. It told the truth. Many people endured and, in fact, survived the war because of the magnificent and heroic service performed by the B.B.C. But, in the opinion of many people, there has been a very considerable change.
I agree with many of the points—more than he would imagine—made by the lion. Member for Derby, North about the necessity for having an external service to reach the entire world, telling what is happening in this country, as long as it performs a national service for this country. We have failed to exploit the transistor revolution, particularly in Africa. The transistor radio, because of the activities of the Chinese and the Russians, has largely become the opium of the people in those parts.
But in the B.B.C. we have a service financed by the Government, who have inadequate control. There has been undue bias, and there is ample evidence that there is an independent foreign policy followed by the B.B.C. which is at times contrary to British interests. I have received many letters from different parts of the world complaining of the slant used by the people speaking on the B.B.C. For example, the newspapers quoted tend to be almost exclusively newspapers to the Left. The people invited to speak on Africa, according to the many people who write to me from Africa, are very distinguished but almost completely Left-wing journalists. There should be a fair balance.
Similarly there is ample evidence that the B.B.C. in its external services, no less than elsewhere, is engaged in psychological warfare against any country endeavouring to contain Communism. The speakers, the sources and the voice all tend to be that way. On programmes dealing with Rhodesia, in particular, and the Portuguese in Africa and in South Africa, there is a distinct slant.
I have received several dozen letters, but I should like to quote one which I received this week from someone in Denmark who is not associated with any political party but has written to me from time to time having listened to the B.B.C. He writes:
The kind of news programmes put out by the B.B.C. quite clearly contain from time to time blatant and more frequently less easily definable nuances of sub-Communist propaganda.


This letter is not from a political extremist but is typical of many letters I have received.
By all means we should expand the overseas work of the B.B.C. But let it be the true voice of Britain and let is speak in the national interest of this country.

10.45 p.m.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Kershaw): I am very glad that the hon. Member for Derby, North (Mr. Whitehead) used the time at his disposal to raise the problems of the external services of the B.B.C, a subject which, as he says, has not been raised for some time. It gives me the opportunity to pay my tribute to the B.B.C. for its work, which is fostering civilised concepts of behaviour. We recognise that it does so largely because of its reputation for telling the truth.
Of course, it is the intention of the Government that the B.B.C. shall be maintained in a fit condition to present Britain to foreign audiences as it has done in the past, and we hope to use the new arrangements set out in the White Paper, to which the hon. Member referred, to augment our external services, and we plan to use our external facilities to beam our news towards Europe.
One thing which I think important is that I should take this opportunity to make clear and to emphasise the respective rôles of the Government and the B.B.C. in regard to external broadcasts. The Government provide the funds, and £13¼ million, or a little more than the hon. Member said, are envisaged this year, and we lay down what languages and what hours shall be used. The Government do not say what the B.B.C. shall say. That is entirely the province of the B.B.C. This policy gets us into hot water sometimes in foreign countries, as it has got us into some from my hon. Friend the Member for Ormskirk (Mr. Soref) tonight. But there are two views about this, and in this country we realise that the B.B.C. can say what it pleases.
I have seen fairly recently telegrams from abroad complaining about what the B.B.C. has said, and we know that foreign countries have sometimes objected, sometimes rather forcefully, to what the

B.B.C. has said. I take this opportunity to make obsolutely clear that what the B.B.C. says is its responsibility entirely. In the end it is to the advantage of everybody, and to the reputation for veracity which the B.B.C. has, that it should be known that what the B.B.C. says is its responsibility, not that of the Government of the day.
The hon. Member drew attention to to the hours and expenditure we spend compared with those of other countries. We should not be too influenced by the comparative tables of the languages and hours broadcast by other external services. It is perfectly true that other nations since the 'fifties have built up far more, proportionately, their outside work. In particular, the Russians and the Chinese, as well as our American allies, have greatly increased the hours of their external broadcasting. The B.B.C.'s have increased, though, I agree, not in the same proportion.
Surely, however, quantity is not everything. Despite this increase in other people's broadcasting, the reputation of the B.B.C stands second to none, and I believe it is true to say of many parts of the world that if a crisis occurs the automatic reaction is to find out what the B.B.C. is saying about it, because listeners know they will get from the B.B.C. factual and truthful description and analysis of what has happened. These are, in general, the world's reactions to the B.B.C. I agree with the hon. Member that the foundation of this reputation was laid in the war, but I believe that the reputation has survived and exists today.
Also, the flexibility of our broadcasting enables us to take advantage of changes in news and changes in direction as necessary.
As to audibility, I must accept some of the criticisms which the hon. Member made. In some parts of the world the B.B.C. is not as audible as one would wish. Of course, it is a matter of cash. The matter is being improved all the time. We have new stations, and we hope to get improvements all the time. Our relay facilities for broadcasting to the eastern Mediterranean, the Middle and Far East, and Africa are now extremely satisfactory. It is true to say that there is no area of the world, certainly none where we consider our vested


interests lie, where the B.B.C. cannot be easily received.
The question of the balance between English language and vernacular is difficult, and the hon. Member was right to call attention to it. We try to strike a right balance between broadcasts in the English language and that of the listeners. The possession of the English language is an inestimable boon to our broadcasters and releases us from the pressures and necessities faced by the Russians and Chinese, who have to use other people's languages all the time.
English is the lingua franca of educated people throughout the world. An increasing number of people throughout the world speak English, and the demand for English language teaching is insatiable.
The B.B.C.'s external services contribute to this, both by broadcasting English by radio lessons and the World Service in English. Measures to strengthen the signal of the World Service everywhere are under continuous study, as are the hours they broadcast in English.
The vernacular services are important. In some parts of the world where there are powerful languages and vast numbers of people who would hardly comprehend English, it would be idle to broadcast in English, as in the Arab countries, to which there is a regular programme in Arabic every day.
Balance is something we always bear in mind, particularly in areas of Communist domination where there is a difficulty in receiving and understanding the English language. There, and to the Arab countries, we particularly wish to have vernacular broadcasting.
We evaluate continuously by audience surveys the efficacy of these broadcasts in the vernacular, and I was interested in what the hon. Member said about the way our broadcasts reach Vietnamese farmers.
The external services of the B.B.C. have to operate within the general framework of the need to contain Government spending. That was also the view of the previous Government, as the hon. Mem-

ber hinted. They introduced a cut in expenditure on external services. The need for economy applies to overseas official services as well as to the B.B.C. Of these, the B.B.C. is by far the greater spender.
It would not be easy to allocate extra financial resources in the way we might like to our external broadcasting. We have to ensure that present resources are well spent and are sufficient to enable the B.B.C. to play its rôle as guardian of western standards of civilisation. Whether or not we achieve it can be a matter of opinion, but I suggest that the evidence from abroad supports the opinion that the B.B.C. does a job much better than is commensurate with the broadcasting efforts of our competitors.
This is the best answer to the challenge posed by our competitors, that we should improve services to meet changing circumstances—continuous improvement in quality and audibility when we are able to do this. The B.B.C. has the capacity to do this and the resources are adequate to the task.

Mr. Whitehead: Would the Minister agree that part of that improvement could be to extend the number of vernacular services which the B.B.C. is permitted to broadcast?

Mr. Kershaw: Certainly. One would like to extend the whole thing the whole time, but within the framework of what we think possible, the balance between vernacular and English is of greatest importance. At the moment we tend to lean toward English rather than vernacular. But I appreciate what the hon. Gentleman said about the coming generation in the developing countries.
The B.B.C. external service does its best—a very good best—to foster the British way of life. It creates sympathy for our country and our ideals and a tendency to buy our exports. The 250,000 letters which are received from abroad shows that it is doing a good job.

Question put and agreed to.

Adjourned accordingly at five minutes to Twelve o'clock.